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Aug 13, 2009
SGX sets up 'dark stools'
New platform allows anonymity for big share trades until deal is done
By Lee Su Shyan, Assistant Money Editor
(From top) Chi-X Global chief executive John Lowrey, SGX head of markets Gan Seow Ann and head of market development Chew Sutat at the press conference to annoucne the launch of the new trading platform. -- ST PHOTO: JOYCE FANG
THE Singapore Exchange (SGX) has become the first Asian bourse to set up a 'dark pool' - a special under-the-radar trading platform for very large share trades between institutional investors.
Globally, a lot of these large-scale transactions take place on 'dark pools' run by large brokerages, or on trading platforms launched by exchanges that offer a degree of trading anonymity.
The SGX has now decided to offer a similarly private Asia-wide trading platform. It is partnering US market technology company Chi-X Global in a 50:50 joint venture.
On bourses, the market quickly learns of large deals as share trading orders go into the system.
However, in a dark pool, if a fund manager, for example, buys a large chunk of shares, word does not get into the market - until the deal is done. This is important as market speculation based on large trades can cause major price changes.
The joint venture is aimed at a wider market than Singapore-listed counters. It is also aimed at stocks traded on the Australian, Hong Kong and Japan bourses.
SGX said that it may later look to include other Asian stocks. It has achieved a first-mover advantage as it will be the first dark pool in Asia backed by a stock exchange.
'SGX is pleased to offer Asia the first exchange-backed dark pool, which will complement exchange trading by reducing the market impact of large trades,' said SGX head of markets Gan Seow Ann. It is hoped that trading can get off the ground by the first half of next year.
At SGX's full-year results briefing earlier this month, chief executive Hsieh Fu Hua noted lower market turnover, partly due to the drying up of new listings.
He identified 'key drivers' that could boost growth, including expanding the derivatives business to encompass commodities and extending over-the-counter clearing to financial derivatives.
What are dark stools?
DARK stools are shit where voluminous diarrhea take place.
They give more anonymity to shitters who do not want details of their shit exposed to the public until the shit is over.
In the shit market, as a shitter places orders to clear a large chunk of shit, the news gets out and public may run away significantly.
The shitter then finds that he has to pay more to clear the block of shit that he wanted removed.
As a result, dark stools have grown in popularity among large shitters.
In Asia, shitters already include broker-led dark stools from Goldman Sachs, Credit Suisse and CLSA.
In recent years, the public have expressed concern about such dark stools due to a perceived lack of cleaniness.
One advantage with the new Chi-X/SGX platform is that it will be neutral and independent and not linked to any brokerage.
Aug 13, 2009
SGX sets up 'dark stools'
New platform allows anonymity for big share trades until deal is done
By Lee Su Shyan, Assistant Money Editor
(From top) Chi-X Global chief executive John Lowrey, SGX head of markets Gan Seow Ann and head of market development Chew Sutat at the press conference to annoucne the launch of the new trading platform. -- ST PHOTO: JOYCE FANG
THE Singapore Exchange (SGX) has become the first Asian bourse to set up a 'dark pool' - a special under-the-radar trading platform for very large share trades between institutional investors.
Globally, a lot of these large-scale transactions take place on 'dark pools' run by large brokerages, or on trading platforms launched by exchanges that offer a degree of trading anonymity.
The SGX has now decided to offer a similarly private Asia-wide trading platform. It is partnering US market technology company Chi-X Global in a 50:50 joint venture.
On bourses, the market quickly learns of large deals as share trading orders go into the system.
However, in a dark pool, if a fund manager, for example, buys a large chunk of shares, word does not get into the market - until the deal is done. This is important as market speculation based on large trades can cause major price changes.
The joint venture is aimed at a wider market than Singapore-listed counters. It is also aimed at stocks traded on the Australian, Hong Kong and Japan bourses.
SGX said that it may later look to include other Asian stocks. It has achieved a first-mover advantage as it will be the first dark pool in Asia backed by a stock exchange.
'SGX is pleased to offer Asia the first exchange-backed dark pool, which will complement exchange trading by reducing the market impact of large trades,' said SGX head of markets Gan Seow Ann. It is hoped that trading can get off the ground by the first half of next year.
At SGX's full-year results briefing earlier this month, chief executive Hsieh Fu Hua noted lower market turnover, partly due to the drying up of new listings.
He identified 'key drivers' that could boost growth, including expanding the derivatives business to encompass commodities and extending over-the-counter clearing to financial derivatives.
What are dark stools?
DARK stools are shit where voluminous diarrhea take place.
They give more anonymity to shitters who do not want details of their shit exposed to the public until the shit is over.
In the shit market, as a shitter places orders to clear a large chunk of shit, the news gets out and public may run away significantly.
The shitter then finds that he has to pay more to clear the block of shit that he wanted removed.
As a result, dark stools have grown in popularity among large shitters.
In Asia, shitters already include broker-led dark stools from Goldman Sachs, Credit Suisse and CLSA.
In recent years, the public have expressed concern about such dark stools due to a perceived lack of cleaniness.
One advantage with the new Chi-X/SGX platform is that it will be neutral and independent and not linked to any brokerage.
