Europe’s largest dark pool Chi-X Europe yesterday played down plans by international regulator IOSCO to limit the activities of these opaque trading systems by making them more transparent.
Global regulatory body the International Organisation of Securities Commissions (IOSCO) on Wednesday issued a consultation paper that outlined proposals to “minimise the adverse impact of the increased use of dark pools”.
But Chi-X Europe’s director of regulation Denzil Jenkins said: “As a set of broad principles, I think few would have any objections to these guidelines. They’re useful but they don’t add a great deal to the debate.”
Dark pools – such as Chi-X Europe, Smartpool and Turquoise with the investment bank dark books – spent much of the early part of this year working with the Committee of European Securities Regulators.
European dark pools have grown in the past five years backed by investors who like these platforms because they limit the trade data shown to the market at large and, therefore, reduce the chance of losses from market impact. Some of Europe’s largest exchange groups have backed rule changes that will force dark pools to become more transparent.