HSBC confirms HK dark pool refocus

HSBC has confirmed that StockMax Crossing, its Hong Kong dark pool, will initially be targeted at institutional and professional investors rather than retail investors as originally planned.
By None

HSBC has confirmed that StockMax Crossing, its Hong Kong dark pool, will initially be targeted at institutional and professional investors rather than retail investors as originally planned.

According to reports, regulators in Hong Kong have told HSBC that they need more time to consider the role of alternative liquidity pools.

In a notice on the HSBC website, which has now been removed, StockMax Crossing was described as a matching service for all equities traded on Hong Kong Exchanges and Clearing (HKEx) that will attempt to cross retail orders against the bank's internal flow. If no match is found in StockMax Crossing, the order would then be routed to HKEx. The benefits of the pool, according to HSBC, would be faster speed of execution and price improvement compared to executing on the exchange.

HSBC is understood to be holding further talks with regulatory bodies on the permissible functionality of dark pools. Dark pools are currently the only form of alternative trading venue allowed in Hong Kong as HKEx's monopoly is currently enshrined in law by the Securities and Futures Ordinance. Recently, the bourse was excluded from a new Competition Bill. Brokers that already operate dark pools in Hong Kong include Nomura, Deutsche Bank and UBS.

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