PLUS Markets Group is to launch a new ‘dark liquidity pool’ that is designed to benefit small and mid-cap companies and improve trading on its markets.
The PLUS-pool will allow institutions to trade privately in securities preventing from competitors from muscling in or interfering on their actions and enabling smoother trading.
The 'dark' practice was originally used by major investment banks, such as Merrill Lynch and Lehman Brothers, which wanted to keep their trading under wraps.
Brokers who acted for buyers and sellers would facilitate the trade on behalf of both parties. This was later extended to include more than one broker and brought into question the very meaning of a publicly quoted share price.
The PLUS-pool will bring the practice above board (at least as much as anonymous trading can be) and will enable large institutional block orders.
John Crackett, director of technology at PLUS Markets, said: "Having already established our market position in small & mid-cap securities, we are delighted to be
leveraging further our trading platform’s functionality and capacity."
© Crimson Business Ltd. 2008
