Dark liquidity pools

Dark Liquidity Pool

A private securities exchange or trading platform. Dark liquidity pools do not publish the prices of their transactions, which allows investors to make larger transactions at lower cost than they might otherwise. Most traders in dark liquidity pools are institutional investors, such as mutual funds or hedge funds, that wish to protect the anonymity of their investments and/or investors. They also may not wish to cause price movements by the disclosure of their transactions. No dark liquidity pool is completely secretive: they must register with the SEC as either a securities exchange or a broker-dealer; they are governed by Regulation ATS, which stipulates certain transactions and prices that they must disclose under various circumstances. See also: Transparency.

Dark liquidity pools.

Dark liquidity pools are private alternative trading systems or platforms. Prices aren't published, and participants can make anonymous trades faster and at a lower cost than they can on a public exchange.

Most dark-pool transactions are between institutional investors, including mutual funds and hedge funds, which trade in large volumes. Their interest in anonymity is either because they want to protect the privacy of their investment choices or because they fear a major transaction could move the markets by triggering copycat trading.

Dark liquidity pools must register with the Securities and Exchange Commission (SEC) as either national securities exchanges or broker-dealers. The broker-dealers must follow the rules laid out in SEC Regulation ATS, which governs fair access and a requirement to publish prices for trades in certain securities under specific circumstances.

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Unsurprisingly, algorithms with the most discretion to trade in dark liquidity pools show the largest improvement, with very significant savings in both our Implementation Shortfall and Sniper Algorithms.
And cross-network trading, including dark liquidity pools ('dark pools') has been increasing since 2006.
Fidessa Group plc (LSE: FDSA), a provider of multi-asset trading systems, market data and global connectivity solutions, announced on Monday (22 October) the addition of connectivity to agency broker Instinet Japan Ltd's PTS - Dark Liquidity Pools, algorithms and direct market access (DMA) platform.
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Dark liquidity pools do not display quotes, but match orders anonymously instead to minimise the market impact of large trades.
The fragmentation of the equity markets has produced exponential growth in dark liquidity pools, and this new fragmented market created difficulties for the buy side and sell side to efficiently locate liquidity," said Dan Mathisson, Managing Director and Head of Advanced Execution Services (AES) "Our goal is to solve market participants' frustration with fragmentation by creating partnerships that enhance access to liquidity while continuing to provide anonymity.
Institutional clients continue to express dissatisfaction in dealing with the great number of dark liquidity pools now available.
Speakers will provide their visionary insights on the future of trading and address key technology issues around new regulations, dark liquidity pools, algorithmic trading and hedge funds.
The ATS framework continues to provide a powerful solution for those looking to access dark liquidity pools for algorithmic trading," said Jose Marques, Director at Credit Suisse.
As markets continue to become more fragmented, the industry is looking for algorithmic trading to access dark liquidity pools and LeveL has provided a powerful solution as seen in its inflow activity," said Jose Marques, director at Credit Suisse.