Dow Jones Newswires – By Caroline Henshaw – June 19, 2012
Australia’s dominant exchange operator ASX Ltd. (ASX.AU) said Tuesday it plans to launch two new “dark pool” trading services next month as it seeks to capture business from the growing amount of off-exchange trade, even as the country’s securities and investments commission plans to step up regulation of the space.
Dark pools are a fast-growing type of alternative trading system where money managers trade shares anonymously and electronically before reporting them to the exchange. Analysts estimate dark liquidity accounts for around a quarter of equities dealings in Australia, as many traders prefer to use dark pools to avoid advertising their buy and sell intentions.
ASX’s General Manager of Trade Execution and Information Services David Raper said the added functionality to its existing dark pool product, Centre Point, should encourage more dark pool traders to operate using ASX’s licensed trading system, which publishes data immediately after the trade takes place, rather than using less-regulated internal bank dark pools.
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