NYSE Euronext's SmartPool signs 14 banks, brokers
LONDON, July 13 (Reuters) - SmartPool, a pan-European non-displayed trading unit of NYSE Euronext (NYX.N)(NYX.PA) on Monday said 14 banks and brokers had signed up to trade on the platform.
An non-display trading platform, or so-called "dark pool", allows traders to execute trading of a big block of shares without disclosing the size or the price, hence achieving price improvement by minimizing market impacts.
"We are currently executing transactions of more than 4 times the average trade size in Europe with anywhere between 4 and 5 basis points price improvement. That's a remarkable value proposition for our customers," said Lee Hodgkinson, chief executive officer.
With computer-driven electronic trading becoming popular on exchanges, the average trading order size of European bourses, or the displayed "lit" order book, has declined to 10,000 euros ($13,910) per trade from 15,000 to 16,000 euros per trade a year ago.
SmartPool, however, offers an average order size of 47,000 euros and requests a minimum order size of 20,000 euros.
However, operators of such anonymous stock trading venues are forced to defend their existence as regulators, including the U.S. Securities and Exchange Commission warned they posed "emerging risks".
The moves of Nasdaq OMX and BATS Exchange to flash orders to private groups of select market participants have drawn criticism.
European Securities Regulators will also hear presentations on Wednesday from the Federation of European Securities Exchanges, which complains that banks have not registered their internal dark pools.
Launched in February, SmartPool is one of 13 dark pools in Europe, competing with Liquidnet, Chi-X and London Stock Exchange's (LSE.L) Baikal, which is launching around September.
"We have a healthy customer pipeline, with a number of new clients scheduled to come onboard in the coming months which will further enhance our liquidity," Hodgkinson added.
SmartPool, in which BNP Paribas (BNPP.PA),HSBC (0005.HK)(HSBA.L) and J.P.Morgan own minority stakes, had signed Credit Suisse CGSG.VX, Instinet Europe, Investment Technology Group (ITG) (ITG.N), Knight Capital Europe, Neonet, Nomura (8604.T), Oddo et Cie, RBS (RBS.L), Sanford Bernstein and UBS (UBSN.VX). (Reporting by Daisy Ku)
