LSE sees uptake in block trading ahead of MiFID II dark trading rules 

LSE says its customers are adapting to changes in dark trading ahead of January 2018 MiFID II deadline.

The London Stock Exchange’s (LSE) block trading initiatives have seen significant growth this year, as the exchange says customers are adapting to changes in dark pool trading ahead of MiFID II in January 2018. 

LSE’s intraday auction and hidden midpoint pegged order “experienced significant growth” in 2016, as its Turquoise Plato Block Discovery reached a €1.5 billion monthly traded record. 

The exchange said those products were specifically developed to meet post-MiFID II trading requirements for buy-side participants. 

“The trend highlights investor demand for trading services that will allow adaptation ahead of MiFID II’s impending limits on pre-trade transparency waivers, expected to significantly alter the use of dark pool and off-order book trading,” LSE said.

Research from LSE estimated that should the current pattern continue next year, every stock in the FTSE 100 would be unable to trade in dark pool venues or off-order books.

Brian Schwieger, global head of equities products at LSE, explained 2017 will be the year that the industry moves into top gear preparing for MiFID II.

“We expect even greater focus given to the problem of working through the double volume caps. 

“We have worked with our customers to launch and develop a suite of innovative new trading services whose adoption is already playing a significant role in the evolution of equities trading that we expect will gather momentum next year,” he added.