Lighting up dark pools

The Singapore Exchange’s planned launch of Asia’s first exchange-backed dark pool may indicate the region’s dominant exchanges are ready to take on brokers providing internal crossing systems for anonymous block trades. At the same time, it offers dark pools a route to legitimacy

At the end of 2009, a total of $18.6 trillion worth of shares were traded both on the electronic order books of Asian exchanges and via bilaterally negotiated deals later reported on exchanges, according to data from the World Federation of Exchanges. That probably means the development of dark pools – crossing systems that offer investors anonymous block-trading services – are gaining traction in the region. Indeed, Boston-based research company Aite Group estimates that by 2012 as much as 20%