| LONDON, Sept 6
LONDON, Sept 6 A group of asset managers and
banks are trying to cut the cost of "dark pool", or anonymous,
trading in big blocks of shares
via a deal with a London Stock Exchange Group unit.
Dark pools, whose transactions are only revealed once they
are completed to avoid unduly moving prices, have come under
scrutiny from regulators who want more transparency in trading.
Plato Partnership, which includes Citigroup, Goldman Sachs,
AXA Investment Managers and Franklin Templeton, said it has
signed the co-operation agreement with the LSE unit, Turquoise.
Turquoise is 51 percent owned by the London exchange and
trades shares across 19 European countries. The rest of
Turquoise is held by 12 investment banks, some of whom also back
"Plato Partnership's key aims remain to reduce trading
costs, simplify market structure and act as a champion for end
investors," Plato said in a statement on Tuesday.
The cooperation agreement coincides with a planned merger of
the London exchange and Deutsche Boerse.
Britain is also due to leave the European Union and
Turquoise currently uses a "passport" under the bloc's rules to
offer cross-border share trading. LSE Group has operations in EU
member Italy which could potentially be used as another base if
Britain lost its passporting rights.
No equity stakes are involved in the Plato-Turquoise
agreement. Buy-side firms will help shape the development of
Turquoise's dark pool services.
The main focus is on Turquoise's "midpoint dark order book"
which handles trades worth over 250,000 euros ($279,000). It
will be renamed Turquoise Plato.
The EU will implement new curbs on dark pool trading from
January 2018 but such large trades will benefit from exemptions.
The new venture brings together for the first time the
"buy-side", or funds who invest in shares, the "sell-side" banks
who channel share orders, and a trading platform which executes
those orders, Plato said.
Turquoise's non-dark or lit trading service is not part of
Dark pools have been accused of favouring some investors
like high-speed traders, over other customers.
But Plato said the new platform will seek to ensure "the
protection of orders with the goal of ensuring fairness for all
($1 = 0.8974 euros)
(Reporting by Huw Jones)