Nasdaq acquires minority stake in US equity dark pool LeveL ATS

The exchange joins existing investors of the equity dark pool trading venue Bank of America, Citi, and Fidelity.

Nasdaq has acquired a significant minority stake in the US-based equity dark pool trading venue, LeveL ATS.

Originally launched in 2006, LeveL ATS is an alternative trading system that provides a continuous crossing platform for users to trade in a dark pool environment, allowing them to minimise information leakage and market impact.

Existing investors in the dark pool include Bank of America, Citi, and Fidelity.

“As one of the most innovative and well recognised broker-neutral trading platforms across US equities, LeveL has demonstrated the ability to consistently meet the evolving needs of investors and serve as an important source of liquidity for its members,” said Tal Cohen, executive vice president and head of North American markets at Nasdaq.

“We are pleased to join several leading sell-side firms to build on LeveL’s suite of products and current market position.”

Unlike public stock exchanges, dark pools are private trading venues for securities to facilitate block trading between institutional investors who did not wish to impact the markets with their large orders and obtain adverse prices for their trades. The minority stake by Nasdaq is the second investment made by a US-based trading venue in a dark pool operator in the past 12 months after derivatives exchange Cboe completed its acquisition of Canadian dark pool MATCHNow from Virtu Financial in August last year.

Elsewhere, London-based market maker XTX Markets also launched a US equities dark pool in April earlier this year and confirmed that Barclays had become one of its first broker partners.

“In a rapidly changing market landscape, our independent operating model has given us the ability to scale and expand our product and service offerings,” said Whit Conary, chief executive officer at LeveL ATS.

“Having Nasdaq onboard provides us with an even greater runway for future growth, innovation and enhanced client experience.”