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Dark Pools Bet on Transparency Algos To Fend Off Regs |
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Wall Street Letter
By Meredith Lepore
September 3, 2010
Bloomberg’s B-Dark enables traders to execute dark orders with more control and visibility because they can see where their orders are being filled. B-Dark can also determine the order’s aggression level and has anti-gaming logic that shows real-time slippage (see related story, page 7). The SEC proposed that information about dark pool trades be reported with the name of the dark pools, and that those identities should be released publicly. In contrast, B-Dark’s data is only shared with the firm that made the trade, allowing the actual customer to figure out whether it got the best deal on execution. Calls and emails to an SEC spokesman were not returned.
Using this kind of data could help traders weed out venues with less-than-stellar execution quality before the SEC even gets to review its proposal, Chapman said. “If more dark pools adopt these algos, then some of the SEC’s dark pool concerns could be assuaged,” said Bernard McDevitt, v.p. of institutional trading at Cheevers and Company.
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