Dark Pools Get a Global Leg Up as JPM and Instinet Inc. Join Dark Forces

Source 

“Instinet Inc., a New York-based alternative trading-venue operator, and JPMorgan Chase & Co. (JPM), have agreed to link their Asia-Pacific (MXAP) dark pools, giving clients access to each other’s platforms in Hong Kong, Japan and Australia.

Instinet’s clients can access 22 dark pools, private trading venues that don’t publicly display prices, in Asia, including 13 from individual brokers, Glenn Lesko, chief executive officer in Asia for Instinet told Bloomberg News in a telephone interview March 20. JPMorgan spokeswoman Marie Cheung confirmed the contents of an Instinet press release announcing the agreement.

Less than 2 percent of transactions in Asia occur through dark pools, according to Investment Technology Group Inc. (ITG), a New York-based brokerage. Dark pools account for 13.5 percent of trading in the U.S. and 4.6 percent of shares changing hands in Europe, according to data compiled by Rosenblatt Securities Inc.

“There is proliferation of new pools in the region,” Lesko said. “JPMorgan is one of the bigger brokers with lots of liquidity in Asia that’s getting their dark pool going. We’re looking to help them by providing our flow into there and reciprocally, we we would benefit from their liquidity.”

Earlier this month, Instinet announced that it would introduce another of its electronic-trading platforms, VWAP Cross, into Hong Kong and Europe. The tool uses the so-called volume-weighted average price, in which orders are matched from buyers and sellers who are willing to wait for the market to generate a price over time.”