SOR delays thwart BlocSec growth
Ned Phillips, CEO of Asian dark pool BlocSec, has acknowledged that plans to bring sell-side liquidity on stream are taking longer than expected, but he denied that the crossing network had stopped taking on new clients.
“Business is getting better every day and the trend is still good. I just wish we were further up the mountain,” said Phillips.
Rumours had been circulating in the market that BlocSec’s parent, Asian broker CLSA, was winding down its support for the platform due to disappointing crossing rates.
However, a spokesperson for CLSA confirmed its ongoing support for its dark pool. “We have continued to expand the markets in which the BlocSec service operates and we are fully committed to continued growth of what we believe is a timely and necessary service in the Asia market. CLSA’s technical, trading and sales expertise has and will continue to support the business going forward,” the firm said.
Phillips added that CLSA has been providing more resource to support the platform’s sales efforts since BlocSec let four salespeople go in February. He also pointed out that a number of broker-owned and independent dark pools in the region had reduced headcount.
BlocSec has largely focused on building up buy-side liquidity since its launch in May 2008, but the firm has more recently been focusing its efforts on attracting sell-side flow. Phillips said he is currently in negotiations with six brokers to direct flow to BlocSec in addition to their own dark pools via smart order routing (SOR). “They are keen, but a lot of this hasn’t been done before in Asia. Unlike certain other regions, you can’t connect up a couple of brokers in a matter of a few weeks,” he said.
BlocSec, which currently offers trading in stocks listed in Japan, Singapore and Hon Kong, reduced its minimum order size to US$250,000 from US$1 million in response to falling block sizes in the region in May.