Dark Pools

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Hong Kong weighs making dark pools off-limits to retail investors By Renee Caruthers

http://www.fiercefinanceit.com/story/ho ... 2014-03-04

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Dark markets may be more harmful than high-frequency trading

By John McCrank

http://www.reuters.com/article/2014/04/ ... orethebell

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How High-Frequency Traders Use Dark Pools to Cheat Investors

By David Zeiler

Source: Money Morning

http://moneymorning.com/2014/04/22/how- ... investors/

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Hong Kong securities watchdog to clamp down on 'dark pools'-sources

Aug 1 (Reuters) - Hong Kong's securities watchdog has warned banks it will clamp-down on exchange trading platforms known as dark pools in a direct fallout from the Barclays Plc scandal in the United States, people familiar with the matter told Reuters.

The increased regulatory scrutiny by Hong Kong's Securities and Futures Commission (SFC) could hurt prospects for the nascent dark trading market in the Asian financial center and may trigger similar action by other regulators in the region, the people added.

Banks in Hong Kong have sought legal advice following a confidential meeting convened by the SFC's supervisory department last month, during which the watchdog told firms it would step-up scrutiny of dark pool marketing materials, one person said.

The SFC declined to comment. Sources also declined to be identified as discussions with regulator were private.

Source: Reuters

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Hong Kong securities regulator set to finalise new dark pool rules -source

May 7 (Reuters) - Hong Kong's financial watchdog is set to finalise new rules on so-called "dark pools" within the next few days, a source familiar with the regulator's thinking said on Thursday.

The Securities and Futures Commission of Hong Kong has been studying whether to allow retail investors to participate in dark pools, the source said, declining to be identified because the matter is not yet public.

The SFC last February launched a consultation on how to regulate dark pools more closely amid growing controversy over and scrutiny of these private share trading platforms in the United States and Europe.

Dark pools are designed to let investors quietly trade shares before the broader market can learn about and bet against their trades.


Source: Reuters

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Hong Kong to Ban Individual Investors from ‘Dark Pool’ Trading

Ban will come into effect on December 1

By GREGOR STUART HUNTER And JACKY WONG

HONG KONG—Hong Kong’s securities regulator said Friday it will ban individual investors from trading in “dark pools” following a 15-month consultation with the city’s finance industry on how to regulate these alternative trading venues.

The ban will come into effect on December 1 this year, the Hong Kong Securities and Futures Commission (SFC) said.

Proponents of dark pools—private trading venues and frequently operated by big banks—say they allow investors to transact more easily and cheaply away from the predations of so-called high-frequency trading firms.

But regulators in the U.S. and Europe are not convinced, and have sought to apply a greater degree of scrutiny.

In Hong Kong, the question of regulation has centered on whether retail clients—often understood as mom-and-pop investors and other nonprofessionals, but also encompassing wealthy private investors such as the city’s real estate and retailing tycoons—should be allowed to trade in the dark.

“They were very concerned about retail investors getting involved in something relatively complex,” Lee Porter, managing director for Asia-Pacific at Liquidnet, said before the announcement. “The intention is to try to protect the interests of retail investors and make sure they understand what they’re doing and getting involved with.”

Trading through automated trading systems—the SFC’s catchall term for electronic trading, which includes dark pools—accounted for HK$35.7 billion in March, or 0.9% of all market turnover, according to Hong Kong Exchanges & Clearing Ltd.

Source: WSJ

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Patterns Found in “Dark Pool” Trades

By Chris Worthington

Source: Wall Street Daily

http://www.thetradingreport.com/2015/06 ... ol-trades/

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SFC Fines BNP Paribas Securities (Asia) $15M for Dark Liquidity Pool-Related Failures

The Securities and Futures Commission (SFC) has fined BNP Paribas Securities (Asia) Limited $15 million for failures in relation to its dark liquidity pool trading services.

The disciplinary action follows an SFC investigation into BNP Paribas Securities Asia’s dark liquidity pool trading services, known as the BNP Internal Exchange (BIX).

Mark Steward, the SFC’s Executive Director of Enforcement, said that no one should dive into dark water without knowing what is hidden.

Operators must have clear rules and procedures in place for operating dark pools, and equally important, they should operate consistently with representations to clients whose consent to enter the dark pool is clear and well-informed.

In determining this disciplinary action, the SFC took into account that BNP Paribas Securities (Asia) co-operated with the SFC in resolving the SFC’s concerns;

Since 2012, BNP Paribas Securities (Asia) has obtained consent from clients before allowing their orders to be matched in the BIX;

The borker had taken steps to rectify the matching logic in the BIX in 2011; The broker agreed to engage an independent reviewer to conduct a forward-looking review of the operation of the BIX; and the broker has an otherwise clean disciplinary record in relation to its business in Type 7 regulated activities.

Source: AAStocks Financial News

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Rules for 'dark pool' trading need strengthening: report

BY SARAH N. LYNCH

http://www.reuters.com/article/2015/09/ ... sinessNews

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BNP Paribas to shut down Hong Kong 'dark pool' business -sources

By Michelle Price

Source: Reuters

http://www.reuters.com/article/2015/11/ ... OXBI5pj.99