Dark pool trio forms European alliance

[Joanne98]

Goldman Sachs, Morgan Stanley and UBS on Thursday agreed to allow reciprocal access to each other’s dark pool block trading facilities for the first time in Europe.

The move is a sign that some of the big players that operate dark pools are trying to find ways around the increasing fragmentation of share trading liquidity across the region by joining forces in an attempt to aggregate liquidity in one place.

Fragmentation is being caused by increasing competition between new trading venues. On Thursday, Nasdaq OMX Europe, the European share trading platform, launched its own dark pool, known as Neuro Dark.

Dark pools – also known as “non-displayed liquidity venues” – are growing in popularity among institutional players who want to execute large blocks of shares away from the public order book of an exchange.

That is because the growth of algorithmic trading and ultra-fast trading systems have led to orders being sliced into ever-smaller sizes on public order books – also known as “lit” markets.

Lit markets are unattractive for such players because large orders are immediately visible to rival traders, putting the initiator of a trade at a potential price disadvantage.

Goldman Sachs, Morgan Stanley and UBS came to a similar agreement involving their three respective dark pools a year ago in the US. The three venues in Europe are Sigma, operated by Goldman Sachs; MS Pool by Morgan Stanley; and UBS Pin, operated by UBS. The move comes weeks ahead of the planned launch by the London Stock Exchange of its own dark pool, Baikal. That is also intended as an aggregator of liquidity in markets where block trades are done anonymously.

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http://www.ft.com/cms/s/0/7f84eb7c-3b2d-11de-ba91-00144feabdc0.html?ftcamp=rss&nclick_check=1

[marketcrazy1]

1. dark pools should be banned

they are just another way the big players rig prices and obscure the market. this lack of market price transparency should be illegal...........

[scholarsOrAcademics]

2. one percent transactions tax

on all currency transactions, as per Tobin tax.
You do know the details, it seems. thanks

[Turbineguy]

3. I guess they figure they can come back

to the US Treasury and get bailed out.

[annabanana]

4. How is “non-displayed liquidity venues” anything but a synonym

for hidden assets and black markets?