The London Stock Exchange (LSE) has delayed the introduction of non-displayed order types to its SETS electronic order book.
Hidden limit orders were due to go live on the platform today, but have been delayed to an unspecified date. Despite recent regulatory concerns over the role of non-displayed trading functionality on price formation in the equity markets, an LSE spokesperson said the reason for the delay to the new order types is purely technical and that a revised launch date is expected to be within the next few weeks.
Regulators’ concerns about dark trading centre on the use of MiFID’s pre-trade data publication waivers. The LSE’s dark order types will comply with the large-in-scale pre-trade transparency waiver, which requires trading venues to implement minimum order sizes for hidden orders based on the average daily turnover and market capitalisation of a stock, as defined by the Committee of European Securities Regulators.
When launched, hidden limit orders will allow market participants to enter limit orders on the LSE’s order book without displaying price or volume to other participants. These orders will be able to interact with both displayed and other non-displayed orders.