Alpha proposes changes to dark pool trading

James Langton Related news Facebook LinkedIn Twitter In a notice requesting comment on the proposed changes, Alpha indicates that the changes are being made in order to bring its IntraSpread functionality in compliance with new trading rules concerning dark liquidity, which are to take effect October 15. “With the removal of 10% dark orders, the expectation is that the volumes of SDL order executions against dark liquidity will decrease, as the economic benefit for liquidity providers is being reduced,” it says. “The introduction of dark orders that can trade with SDL orders at the NBBO is intended to provide a service that can offset the decrease in liquidity that is likely to occur after the implementation of the new requirements regarding dark pools.” Additionally, SDL orders will now also trade against visible liquidity on Alpha, thereby increasing the pool of liquidity available for these orders. So, it expects that overall fill rates for active retail flow routed to IntraSpread will increase “due to additional matching with visible orders.” It also proposes a number of housekeeping changes that are being made in response to amendments to the trading rules regarding short selling, which also takes effect October 15. Comments on the proposed changes are due by August 27. Big U.S. fund managers plan dark pool platform Share this article and your comments with peers on social media Free trading in the dark coming to TSX next month Alpha Exchange Inc. is planning changes to its dark pool trading in preparation for new rules guiding the availability of dark liquidity. In the latest OSC Bulletin, the exchange has published proposed amendments to the functionality of its IntraSpread facility that would do away with dark orders that provide price improvement of 10% over the national best bid and offer (NBBO), and introduce dark orders that can trade at the NBBO with either large (over 50 board lots or $100,000) so-called SDL orders — which are orders that are designed to “seek dark liquidity”, by only trading with dark orders — after visible volume on Alpha has been exhausted; or with small SDL orders that provide price improvement. TSX to tag dark trades Keywords Dark poolsCompanies Alpha Group read more