Equity brokerage CLSA has set up a new dark pool in Hong Kong after receiving a licence to operate under the region’s ‘type seven’ alternative trading system (ATS) regulation.
The licence allows CLSA to offer its crossing engine and dark pool directly to its institutional investor client base.
CLSA says its dark pool is unique in Hong Kong because it is agency-only. It does not contain any proprietary, facilitation, aggregator or high-frequency flow. No indications of interest are permitted within the CLSA dark pool, which does not yet have a name.
CLSA now offers crossing engines or dark pools in Hong Kong, Japan and Australia.
Dark pools are currently run under ATS rules included in the ‘type seven’ licenses. A group of pending applicants received their licenses in July. A year and a half ago, Hong Kong’s regulatory authority the Securities and Futures Commission (SFC) abruptly suspended the application process, which left half a dozen firms in limbo.
The SFC has said it will send out a consultation paper to the market during the third quarter of 2013 on the matter of dark pools after which new regulations are likely.