Nasdaq unveils dark pool hosting plan

Nasdaq is apparently in negotiations with a number of banks and brokers about taking over the running of their dark pools, according to Reuters.

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Nasdaq unveils dark pool hosting plan

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The exchange has developed its own hosted dark pool, called Ocean, which uses Nasdaq's technology, operations and compliance monitoring.

Speaking at the company's investor day presentation, Nasdaq's president and chief operating officer told Reuters that "it's just a matter of time" before it announces deals with clients.

Nasdaq is one of the 12 public exchanges competing with the 40 broker-run dark pools operating in the US. Its plan to provide hosting for dark pools was first voiced back in January 2015, although little has been heard of the plan until now.

So-called dark pools, private trading venues operated away from the transparency of centralised stock exchanges, have proved popular in recent years with traders seeking anonymity and lower fees.

But an increasing regulatory burden has increased the operating costs for banks and brokers, particularly in terms of technology.

Some have also incurred large legal costs over cases alleging that banks' trading desks have profited from the confidential customer information held in their dark pools.

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