UBS to Launch Dark Pool in Europe
March 9, 2010
UBS Investment Bank said Tuesday it planned to launch a dark pool in Europe.
The Swiss financial services firm said its multilateral trading facility, UBS MTF, will be a 100% dark liquidity pool, with no pre-trade signaling or display of any kind. The pool will cross orders in European stocks.
Trades completed in UBS MTF will be reported in real time to Markit BOAT data service. The UBS book will offer mid-point matching based on the price of the primary market. The facility will use a Central Counterparty clearing model, to mitigate counterparty risk and reduce settlement costs.
UBS MTF will maintain “rigorous confidentiality” and be separated from the rest of the firm’s execution businesses.
Members of the pool will benefit from access to liquidity that compements to UBS's existing internal discretionary crossing service, known as UBS Price Improvement Network.
“For many years UBS PIN has offered our clients very effective crossing opportunities for matching algorithmic orders with other internal client flow. The new UBS MTF will now give clients access to an additional, even more diverse pool of liquidity,” said Tim Wildenberg, head of Direct Execution Services in Europe for UBS Investment.
“Based on our experience with our Alternative Trading System in the US, we believe the MTF will offer incrementally improved crossing opportunities while still providing reduced signalling risk and measurable spread savings. All without requiring clients to do any additional work or change their trading strategies,'' he said, in a prepared statement.
The launch is subject to the approval of the United Kingdom’s Financial Services Authority.
