London Stock Exchange making waves in dark pool universe

DEC 01, 2009
The London Stock Exchange PLC said Monday it has agreed to take a 60 percent stake in rival loss-making trading platform Turquoise and plans to create a new pan-European trading venture by merging it with its own "dark pool" platform. The LSE said it had agreed to fund the new venture for the first two years following completion of the deal, and expects to incur exceptional costs of up to 20 million pounds in the current year, reflecting the cost of restructuring and integration. The new venture, merging the LSE's Baikal trading platform, will retain the Turquoise name. "Dark pools" are trading platforms where banks, hedge funds and institutional investors can trade large blocks of shares in secret. Existing shareholders in Turquoise will own 40 percent of the new company. The LSE added that it intended to broaden equity participation in the new venture by selling up to a further nine per cent of the issued share capital to other interested parties. "The European marketplace for trading securities has scope to become more efficient and to grow significantly in the coming years," said LSE Chief Executive Xavier Rolet. "Turquoise's existing pan-European footprint is a strong proposition and together with the introduction of new trading technology and a neutral structure, we believe it is now well positioned to be an agent of change and to capture a healthy slice of the market's growth potential." Turquoise CEO Eli Lederman said that the LSE's support would enable the struggling platform to "simplify our operational structure, attract a wider network and expand the platform's product base." Turquoise made a pretax loss of 15.7 million pounds. The secretive nature of the platform is attractive to banks and other investors because it avoids alerting competitors to their trading strategy and minimizes the impact of shifting stock prices on the market. They have been gaining in popularity in recent years, raising some concerns from market regulators about poor transparency.

Latest News

People moves: RBC taps Raymond James veteran for Texas complex
People moves: RBC taps Raymond James veteran for Texas complex

Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant

Ex-LPL, special needs advisor pleads guilty in fraud case
Ex-LPL, special needs advisor pleads guilty in fraud case

Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.

Advisor moves: Raymond James lands $700M Truist team in Naples
Advisor moves: Raymond James lands $700M Truist team in Naples

Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL

Investor accuses Lasater Capital of hiding $100M in fund defaults
Investor accuses Lasater Capital of hiding $100M in fund defaults

Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.

American Express to make job cuts as AI revolution ramps up
American Express to make job cuts as AI revolution ramps up

“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor