US investment bank Goldman Sachs is set to launch an off-exchange automated trading platform in Europe that will provide clients with access to dark liquidity pools.
Goldman Sachs is expected to begin contacting its largest clients in Europe this week about its new smart order routing system, Sigma, according to a Financial Times report.
The new platform will provide customers with access to deals that are not offered publicly on any exchange. The bank is thought to have recruited three other market makers with which it will share information about deals available in its dark liquidity pool, says the report.
The move comes ahead of changes that will be introduced following the implementation of the EU's Markets in Financial Instruments Directive (MiFID) in November 2007.
Currently EU rules require all trades to go through a stock exchange but the new legislation will enable banks to trade shares internally - off-exchange - although they will be required to publish the prices of intended trades to the rest of the market beforehand.
Goldman Sachs is also one of six Wall Street banks that are teaming up to launch Block Interest Discovery Service (Bids), an electronic platform that will provide users with access to dark liquidity pools.