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New Canadian Regulations on Dark Pools Protect Institutional Investors

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REGULATIONS SUPPORT EXISTING STRUCTURE OF LIQUIDNET

Toronto
Liquidnet, the global institutional trading network, welcomes the decision by the Canadian regulators, released on Friday (4/13), to ensure that the new Canadian rules on dark pools preserve appropriate protections for institutions seeking to execute large block orders. These protections reflect the existing structure of Liquidnet’s offering to pension and other large, long-term investors. The regulations confirm the growing importance of an institutional network to execute large block trades anonymously, securely and without market impact.

Three key changes of the new regulations include:

  • Visible order priority – Visible orders will have execution priority over dark orders on the same marketplace at the same price.
  • Meaningful price improvement – For an order below block size to trade with a dark order, the dark order must provide an execution price better than the displayed quote by one trading increment (typically one cent).

  • Minimum size – IIROC has the ability to designate a minimize size for dark orders.  CSA and IIROC will monitor market developments closely to consider whether and when IIROC should implement a minimum size.

About Liquidnet

Liquidnet is the global institutional trading network that connects over 700 of the world’s top asset managers to large-scale equity trading opportunities across the globe — 41 markets across five continents. With an average trade size of more than 44,000 shares in the US, 68,800 in Canada, and approximately $1 million in Europe, Africa and Asia Pacific*, Liquidnet is a leader in large block trading globally. Liquidnet does this by going beyond what the retail market can provide by defending and securing the integrity and the anonymity of the block trade while continuously looking for ways to bring in new sources of safe, actionable liquidity from asset management firms, exchanges, brokers and corporations. Asset Managers rely on Liquidnet to help them protect the performance of their portfolios by allowing them to enter and exit their portfolio positions more efficiently. For more information on the Liquidnet community, its liquidity, block executions, and additional investment capabilities, visit www.liquidnet.com.

Contact

Freda Colbourne
+1 416 560 7794
colbournef@gmail.com

*as of 1H 2012 
©2012 Liquidnet Holdings, Inc. and its subsidiaries. Liquidnet, Inc. is a member of FINRA/SIPC. Liquidnet Europe Limited is authorized and regulated by the Financial Services Authority in the UK, is licensed by the Financial Services Board in South Africa, and is a member of the London Stock Exchange and a remote member of the Warsaw Stock Exchange and SIX Swiss Exchange. Liquidnet Canada Inc. is a member of IIROC and a member of Canadian Investor Protection Fund. Liquidnet Asia Limited is regulated by the Hong Kong Securities and Futures Commission as a licensed dealer and a provider of automated trading services pursuant to the Securities and Futures Ordinance and is regulated by the Monetary Authority of Singapore as a Recognized Market Operator. Liquidnet Japan Inc. is regulated by the Financial Services Agency of Japan and is a member of JSDA/JIPF. Liquidnet Australia Pty Ltd. is registered with the Australian Securities and Investment Commission as an Australian Financial Services Licensee, AFSL number 312525, and is registered with the New Zealand Financial Markets Authority as a Financial Service Provider, FSP number FSP3781.

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