U.S. firm Getco aims to launch European "dark pool"

* Says no launch date set yet

* Will segregate dark pool from other market-making

LONDON, April 22 (Reuters) - Getco, a leading high-frequency market-maker, aims to launch an over-the-counter (OTC) European equities trading "dark pool", an executive said at a conference on Thursday.

Dark pools are trading venues that allow buyers and sellers of large stock orders to avoid revealing pre-trade information and signalling their intentions to the rest of the market.

"We believe that price discovery is a public good, but there are lots of valid reasons to execute in the dark," said John Ross, Getco's global head of execution services, told WBR's TradeTech Europe 2010 conference.

"We are still exploring it and have not set a go-live date," he added later on the sidelines.

A dark pool would allow Getco to tap into an area of rapidly growing trading volumes in Europe. As trade sizes fall, due in part to high-frequency trading, investors are turning increasingly to dark pools to execute large-size orders.

Chicago-based Getco has been functioning as a market-maker in Europe for five years on exchanges and their newer rivals, known as multilateral trading facilities (MTFs), such as Chi-X Europe and BATS.

The firm puts up bid and ask prices on stocks and makes its profit from the spread -- the same function that traditional market-makers have done but electronically and holding stocks for much shorter periods, Ross said in a panel discussion.

High-frequency market-makers use computer algorithms to trade rapidly in and out of stocks to take advantage of minute changes in prices. They typically aim to end each trading day with no exposure.

In an OTC dark pool, the fund manager or other market participant going into a trade would know that Getco would be taking the other side, whether buying or selling.

Ross told the conference it would be important to Getco to segregate the dark pool to ensure there would be no leakge of information to its other market-making operations.

OTC dark pools, offered by almost all big broker-dealers, are not subject to the same regulation imposed on those run by exchanges and MTFs, including mandatory mid-point pricing and immediate post-trade price transparency.

In the United States, the firm's Getco Execution Services has for several years been matching buy and sell orders from brokers for institutional or retail investors. (Editing by David Holmes)