Direct Market Access (DMA) refers to electronic facilities that allow buy side firms to more directly access liquidity for financial securities they may wish to buy or sell. Using DMA, the firms still use the infrastructure of sell side firms but take over more of the control over the way a transaction ("trade") is executed. There are several motivations to use DMA rather than alternative forms of order placement:
- DMA offers lower transactions cost
- DMA orders are not worked by brokers, so there is less chance of error or execution irregularities
- DMA orders can be extremely fast, and allow traders to take advantage of very short lived market opportunities
DMA was previously provided by independent firms, but the acceptance of such facilities has led to consolidation and acquisition by established sell-side firms.
