UBS launches new US dark pool

Investment bank UBS’s global equities business has launched a new alternative trading system (ATS) for crossing orders in US stocks.
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Investment bank UBS’s global equities business has launched a new alternative trading system (ATS) for crossing orders in US stocks. The non-displayed crossing pool, called UBS PIN ATS, is a component of the firm’s global Price Improvement Network (PIN).

The new crossing pool will enable client orders to interact with UBS’s US equity order flow – including client agency flow and UBS trading desks. UBS trades around 690 million shares a day in the US, and this pool of order flow will now be available to cross with UBS clients’ direct market access (DMA) and algorithmic trading orders in PIN ATS.

The ATS order book will not be published, or generate indications of interest (IOIs) or signalling. The platform was registered as an ATS with the SEC earlier this month. Clients trading electronically with UBS via algorithms or DMA tools will automatically have access to the ATS with no additional trading steps or fees.

The firm created the ATS to complement its internal crossing network, UBS PIN Cross. This network, which has been operating since 2006, offers interaction with a subset of the firm’s equity order flow – approximately 350 million shares a day – almost half of which is retail order flow. This internal crossing pool was designed to discretely cross with only natural liquidity, without information leakage.

“The combination of these two platforms gives clients the best of both worlds, a natural-only pool of liquidity for highly sensitive situations, and the much broader PIN ATS pool, which brings together a wide variety of order flows,” said Raul Esquivel, head of equities in the Americas at UBS, in a statement.

Will Sterling, global head of direct execution at UBS, added,

“PIN Cross has been very effective, but the selective nature of this internal pool did exclude certain sources of crossing opportunities. PIN ATS will give clients access to an additional, more inclusive pool of liquidity, which we believe will offer clients incrementally improved crossing opportunities – translating to reduced signaling risk and measurable spread savings.”

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