We've noted recently that clients aren't necessarily savvy customers when it comes to the ins and outs of the many dark pools competing for their order flow. The rise of IOIs has thrown a wrench into the process for some. In that vein, a new survey from Greenwich Associates confirms there is a general lack of transparency that troubles some. More than 35 percent said that their broker-dealers don't disclose if a dark pool is completely dark. More than 35 percent also say they are unclear exactly how their orders interact with others. Almost half of the survey's respondents said dark pool providers do not disclose the types of orders they accept, or anti-gaming measures and controls. Here's Greenwich Associates' top 10 questions every institution should ask its dark pool provider:  

1. Are you a true dark pool, (i.e., completely anonymous, without any information leakage) or will information regarding my orders be conveyed to potential liquidity providers?

2. Does your platform route orders out of your dark pool or from any other system connected to your dark pool, including your smart order router, to ECNs, ATSs or any other external source?

3. If you allow indications of interest (IOIs), is it an opt-in or an opt-out process, or will this decision be made for me?

4. What information regarding my order will be included in an IOI (symbol, side, size, and/or price)?

5. What type of order flow populates your dark pool (i.e., proprietary orders? retail orders?)?

6. How do you count matched volume (single or double count) in your dark pool for purposes of what is reported to the tape and advertised, and are orders that are routed out of your dark pool and executed by another party counted toward your own volume?

7. Do you match within the spread or at the spread?

8. What anti-gaming controls are in place?

9. Do you have a minimum size limit?

10. How will my orders interact with your proprietary orders in terms of priority?

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