(Adds details, comments)
HONG KONG Feb 27 Hong Kong will launch a
consultation period concerning future regulation of dark pool
trading networks, the territory's securities regulator said on
Formally known as alternative liquidity pools (ALPs), dark
pools are anonymous trading platforms. Dark pools do not publish
bids or offers on shares, allowing large investors to trade big
blocks without having news of their orders move the price.
Hong Kong's Securities and Futures Commission (SFC) said it
was proposing to enhance and standardise the regulatory
obligations imposed on Hong Kong licensed corporations that
operate the platforms.
Authorities in Asia have for the last several years worked
on enhancing regulation of both high frequency trading networks
and dark pools, keen to avoid the trading glitches and "flash
crashes" elsewhere that have been attributed to the rapid rise
of algorithmic trading.
The SFC said in its announcement that a two-month
consultation period would examine several proposals, including
restricting access to ALPs to institutional investors, enhancing
the level of disclosure and introducing more record keeping and
"The growth in the number of ALPs has catalysed global
recognition that these systems must be appropriately operated to
protect client interests and preserve market integrity," SFC CEO
Ashley Alder said in the statement.
The European Union reached an outline deal last November
that took aim at dark pool trading by placing a cap on certain
(Reporting by Michael Flaherty; Editing by Jacqueline Wong)