Dark order books, which permit shares to be
bought and sold without publicly informing the market until the
trade is completed, accounted for 6.9 percent of total European
stock trading last month, up from 6.4 percent the month before
and 5.7 percent a year earlier.
Around 53 billion euros ($66.95 billion) worth of shares changed
hands in dark pools in September, up 20 percent from the
previous month and 29 percent year on year. This compares with
just 250 million euros in January 2008.
Dark pool trading has been rising despite growing scrutiny by
regulators, who are concerned that brokers and proprietary
trading firms that use aggressive high-frequency trading
strategies have an unfair advantage over other clients.
Since June, U.S. authorities have begun investigating dark pools
operated by a number of European and U.S. banks, including
Switzerland's UBS and the United States' Goldman Sachs Group.
UBS Multilateral Trading Facility, BATS Chi-X Europe and
Turquoise were responsible for roughly half of all orders
executed on "dark" books last month.
Dark pools' share of total market turnover may still be small,
but they have been growing faster than "lit" order books - where
live trade data is published - operated by primary stock
exchanges and various other firms.
Equity turnover on these "lit" order books rose 5 percent year
on year in September to 714 billion euros, but it remains down
from over a billion in 2008. Total turnover across dark and lit
order books was up 7 percent last month to 767 billion euros.
(1 US dollar = 0.7916 euro)
(Reporting By Francesco Canepa; Editing by Larry King)
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