Banks to defend dark pools

The Investment Banking Association is today expected to reject claims from European stock exchanges that “dark pool” trading facilities have created an uneven playing field. It will argue that they provide a legitimate service and encourage liquidity in the market. Dark pools enable investors to trade large blocks of shares anonymously without prices being revealed until after trades are completed. The group of stock exchanges said they threaten fair price discovery for stocks and that banks should improve transparency and operate dark pools more formally.