BlocSec, an Asian dark pool owned by Asian brokerage and investment group CLSA Asia-Pacific Markets, has revised its minimum order size requirements for block trades on its proprietary crossing platform.
Previously, a US$1 million minimum order size for all block trades was imposed to prevent gaming, but BlocSec has responded to client interest in crossing small- and mid-cap stocks by allowing order sizes above 20% of average daily volume (ADV).
With the updated model, orders are initially tested for the US$1 million minimum, but if this fails, a second test measures the size of the order against the percentage of ADV of a stock. This is set at 20% of ADV based on a 30-day moving average, which according to BlocSec, will smooth-out the inevitable spikes in volumes for less liquid securities.
“This development allows us to deliver a broader and more relevant customer service without compromising the anti-gaming principals which underline our offer,” said Ned Phillips, CEO, BlocSec.
BlocSec was launched in Japan and Singapore in May 2008 and rolled out to the Hong Kong market in August.