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Banks publish data for dark pool trading

Steve Dinneen
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SIX big investment banks have published trading volumes for their “dark pools” for the first time, showing them as a tiny fraction of the market, not the major hidden rivals to stock exchanges that some argue.

Citi, Credit Suisse, Deutsche Bank, JP Morgan Cazenove, Morgan Stanley and UBS together executed €596m (£512m) of equity trades from 15 countries on their automated crossing systems on Friday, according to Markit data.

That accounted for around 0.4 percent of all types of cash equity trades in Europe and 1.6 per cent of all over-the-counter (OTC) trades reported on the Markit BOAT service that day, according to Thomson Reuters.

Dark pools are electronic platforms that allow would-be buyers and sellers of large orders of shares to avoid revealing pre-trade information and signalling their intentions to the rest of the market.

Markit will continue to provide daily data on the aggregate volumes of the banks’ dark pools, the Association for Financial Markets in Europe (AFME) said yesterday.

The AFME) said it hoped publication of the data would help dispel fears surrounding dark pools.

A spokesman said: “You hear rumours that these trades account for 30 or 40 per cent of trades but we don’t think this is anywhere close to the real figure.

“Market regulators will be able to look at the figures and make an informed decision over whether further regulation is needed”

FAST FACTS | MARKIT

• Markit provides independent data, valuations and trade processing across all asset classes.

• Markit was founded in 2001 as the first independent source of credit derivative pricing. It now employs more than 1,500 people.