Goldman Sachs, Morgan Stanley and UBS have agreed a deal that will allow their clients to access each bank's European dark pools.
The agreement, which follows a similar deal between the three in the US last year, covers Goldman Sachs' Sigma, Morgan Stanley's MS Pool and UBS Pin.
The arrangement is designed to combat growing fragmentation in the region by allowing algorithmic trading orders received by each firm to interact with the European equity liquidity found in their dark pools.
The decision to work together comes as competition in Europe heats up. Nasdaq OMX is set to launch its Neuro Dark pool on Monday while the LSE will enter the fray with its Baikal platform later this year and Chi-X Europe plans its own offering in the second quarter, subject to regulatory approval.
The growth in the use of dark pools by the buy side is set to grow significantly during 2009 according to a recent global survey of 590 investors undertaken by buy-side trading network Liquidnet.
In Europe, nearly three quarters (73%) of participants questioned plan to increase their use of dark pools this year, compared to 58% in Asia and 52% in North America.