Finding the best trade price used to mean calling one exchange. Today it means scanning a dozen venues in microseconds, and that shift matters even more here in South Africa.

In short
Liquidity is no longer confined to one market. It’s scattered across exchanges, dark pools and alternative venues, too fast and too dispersed for any human to track. A smart order router (SOR) does that job continuously. In South Africa, with the JSE and A2X now both quoting in many of the same shares, it’s become essential.

The Problem: Liquidity Has Scattered, Not Disappeared
MiFID I/II and similar reforms opened equity trading to competition. European venues nearly doubled, from 17 in 2007 to ~30 a decade later, spanning exchanges, MTFs, systematic internalisers, dark pools and periodic auctions. A single stock can now trade at different prices, in different sizes, across a dozen venues at once. ESMA finds lit continuous trading makes up well under half of European equity activity, with bilateral and OTC trading the majority, and has flagged that this fragmentation makes best execution harder to satisfy without better technology.

Why a Smart Order Router Solves This
A SOR continuously scans venues, weighs price, depth, speed and fill probability, and routes or splits orders for the best outcome, faster than any human could.

• Regulation demands it. MiFID II requires “all sufficient steps” toward best execution, unachievable by hand across dozens of venues.
• It finds hidden liquidity. SORs connect to lit exchanges, dark pools, SIs and auctions simultaneously.
• It manages lit vs. dark. Large orders go to dark pools first to limit market impact, then lit venues if needed.
• It adapts continuously as venues change fees and order types.
• It’s a competitive edge. Routing quality now drives execution quality and client retention as much as venue access does.

South African Context: JSE and A2X
The JSE was South Africa’s only real equity venue for decades. That changed in 2017 when the FSCA licensed A2X Markets, offering secondary listings on lower-cost technology built on Aquis Exchange’s matching engine. Many of the same shares now trades on both JSE and A2X with identical rights and settlement; only cost and available liquidity differ.

Why This Makes SOR Essential Locally

• Fiduciary duty: checking only one of two regulated venues can’t credibly count as best execution.
• Real savings: A2X typically cuts transaction costs 40%+; a SOR is what actually captures that, order by order.
• Resilience: two venues remove the single point of failure; if one goes down, a SOR keeps routing to the other.
• Better price discovery: pooling liquidity signals from both venues gives a fuller view of true market value.

The Takeaway
Liquidity hasn’t vanished, it’s just hiding across more venues at once. A smart order router tracks it down and reassembles it into one best-execution decision per order, in real time.

By Neal Lawrence, A2X CTO