Wall Street banks Goldman Sachs, Morgan Stanley and UBS have agreed a series of bi-lateral agreements that will allow their US clients to access each bank's dark liquidity pools.
The banks say these arrangements allow algorithmic trading orders received by each firm to interact with the US equity liquidity found in three of the largest broker-dealer operated dark liquidity pools in the US - Goldman Sachs's Sigma X, the Morgan Stanley MS Pool and UBS's PIN Alternative Trading System (ATS).
The banks says the move seeks to address the growing complexity of market fragmentation across various non-displayed liquidity venues. But the banks have stopped short of combining their dark pools.
"Our clients are looking for incremental liquidity without having to split each order across many different algorithms," says Will Sterling, MD of electronic trading at UBS. "These agreements should offer clients access to additional high quality liquidity without making their trading process more complex."
Greg Tusar, MD of electronic trading at Goldman Sachs, says: "Providing our respective clients access to each other's liquidity will achieve even better crossing results for our clients in an increasingly fragmented market."