MiFID II implementation may significantly affect investors’ ability to source dark liquidity effectively. Broker crossing networks will disappear, and certain types of dark trading will be mostly restricted to midpoint.
If triggered, the introduction of double volume caps will limit certain dark trading volumes per stock to 4% in a single dark pool and 8% across all dark pools. The double volume caps are likely to result in six-month dark trading suspensions for many stocks, increasing market complexity around trading suspended stocks and tracking the status of each stock.
But that doesn’t mean that dark trading will disappear. Industry participants have launched initiatives to help investors find liquidity in the new regulatory environment.
ITG has a long history of helping clients deal with market complexity, and a deep expertise in dark pool trading, with a range of dark trading tools including desktop conditional order systems such as POSIT Alert and algorithms such as POSIT Marketplace and Dark Allocator.
Duncan HigginsContributors Managing Director, Head of Electronic Sales, EMEA
Duncan Higgins joined ITG in January 2010 and is responsible for the sales of algorithmic execution, electronic liquidity access products, and the Triton EMS for European markets.
Prior to ITG, Duncan was at Turquoise, leading the Sales and Marketing teams. He also spent nine years representing UBS on the boards of BOAT and Turquoise.