Chi-X Europe is to launch a dark liquidity pool in Q2 2009, subject to regulatory approval.
The multilateral trading facility currently offers participants hidden order types in the visible order book for larger block trades. It says the new Chi-Delta platform will operate as a separate, non-displayed referenced pegged order book for orders that do not meet the "large in scale" order size requirements.
Mid-peg, primary peg and market pegged orders will be supported and orders will match on a continuous basis, says the company. Trade execution costs for orders posted on Chi-Delta will be waived from launch until 31 August 2009. IOC (Immediate or Cancel) orders will be charged at 0.30 bps for execution.
Hirander Misra, chief operating officer of Chi-X Europe says the system has been developed in response to participant demands for a dual market structure that includes a market for speedy price discovery and a market for non displayed crossing.
"We developed Chi-Delta with this in mind, to help those participants wanting to execute orders whilst minimising market impact by potentially trading with a natural counterparty and limiting information leakage," she says.
News of the launch comes just a day after the London Stock Exchange announced its technology partners for the development of its own Baikal dark pool trading facility. The LSE has yet to set an official launch date for the platform.
The growth in the use of dark pools by the buy side is set to grow significantly during 2009 according to a global survey of 590 investors undertaken by buy-side trading network Liquidnet.
Despite the recent decrease in exchange trade volumes, the report found that the majority of participants globally are planning to increase their use of dark pools, with 54% of those questioned predicting an increase, and only seven per cent foreseeing a decline in their dark pool volumes. Nearly three quarters (73%) of European participants questioned plan to increase their use of dark pools this year, compared to 58% in Asia and 52% in North America.