SmartPool, the dark multilateral trading facility operated by exchange group NYSE Euronext, has identified European small- and mid-cap stocks as a target for future expansion. The dark pool is also planning to expand its presence in continental Europe and add trade analysis fuctionality.
SmartPool has reported a boost in trading volumes since November last year, following its migration to NYSE Euronext’s universal trading platform (UTP), a single trading engine and point of connectivity for the group’s cash markets, and its absorption of fellow dark MTF NYFIX Euro Millennium.
SmartPool merged with Euro Millennium following NYSE Euronext’s acquisition of parent company NYFIX in August last year.
According to data vendor Thomson Reuters, SmartPool traded €315.8 million in January 2010, an increase of almost 81% on November’s turnover of €174.5 million. This growth gave SmartPool a 2.66% share of the dark pool market in January, up from 1.61% in November. SmartPool also reported an increase in the number of trades by 51% compound from November to over 47,000 in January and it recorded market share highs of 8.1% of the MSCI EMU Large Cap index and 7.1% of the Dow Jones STOXX 600 on 13 January.
In January, the MTF also recorded an 8.8% market share of dark trading in Danish stocks, 4.6% of Finnish stocks and 4.5 of Swedish stocks, according to its own figures.
“There are opportunities outside of the major European blue chips that have not yet been fully exploited by other dark pools,” Lee Hodgkinson, SmartPool CEO, told theTRADEnews.com. “This is why we added mid- and small-caps to our platform and are looking for further growth.”
With the addition of Bank of America Merrill Lynch, which will start trading on SmartPool in the coming days, Hodgkinson said most of the large London-based investment banks are now members of the dark pool. The focus for SmartPool in the coming months will be to attract more continental European firms via the UTP, which allows NYSE Euronext members to trade on SmartPool using their existing connection, and add new functionality.
“We have started our push into continental Europe and expect to announce the first few new customers within the next couple of weeks,” confirmed Hodgkinson. “We are also developing post-trade data analytics services, which we will be releasing in the coming months.”
SmartPool was launched by NYSE Euronext in February 2009 in conjunction with investment banks J.P. Morgan, HSBC and BNP Paribas.