Nine asset managers led by Fidelity are reportedly about to launch a dark pool that will allow them to trade large blocks of stock among themselves without the involvement of sell-side firms or high-frequency traders.
Would banks consider outsourcing the management of their dark pool infrastructures to... exchanges? That is the concept reportedly being floated by at least two of the country's leading exchanges, Nasdaq and BATS Global Markets, according to Wall Street Journal and Reuters reports.
In an open letter to the industry and the Securities and Exchange Commission, BATS Global Markets is proposing tiered market access fees, calling for a change from the "one-size-fits-all aspects of market structure." The Lenexa, Kan.-based exchange is also proposing certain modifications to Regulation National Market System (Reg NMS) related to greater order handling transparency and higher standards for small trading centers.
Project Neptune, a plan for boosting liquidity in the European and U.S. corporate bond market backed by more than 25 financial institutions, has reportedly completed a major step in its development. Sell-side banks and buy-side institutions have agreed to a common protocol for exchanging information about dealer inventory available in the market.
Citigroup is closing its LavaFlow alternative trading venue because the firm decided the venue hasn't achieved enough scale to merit continued investment. The move comes just months after LavaFlow was forced to pay $5 million in regulatory fines and as alternative trading systems and dark pools in general are coming under increased scrutiny.
As CEO of a trading venue that has long used electronic auctions as its signature trading method, PDQ chief executive Keith Ross might seem like an unlikely person to challenge a proposal to replace central limit order book trading with frequent batch auctions. But for Ross, not all electronic auctions are created equal.
ICAP's EBS foreign exchange trading business will launch an anonymous bilateral liquidity pool in early 2015. The company will segment EBS Select, the new pool, so that prices will be delivered in an undisclosed environment and a segregated liquidity pool.
Turquoise, the European dark pool owned by the London Stock Exchange, has launched a service for trading large block orders, with liquidity provided by seven brokers out of the gate.
Wells Fargo shut its alternative trading system or dark pool on Friday due to weak demand in a crowded market that includes dozens of alternative trading venues.
Independent execution and research broker ITG is launching a dark pool algorithm that is says will help buy side investors increase fill rates in non-displayed venues while filtering out "toxic" liquidity.