Deutsche Bank is to offer dark pool trading in Hong Kong via an internal crossing network and liquidity-searching algorithm that will file client orders across multiple off-exchange trading venues in Asia.
The Deutsche Bank Automated Trading System (Dbats) is being made available concurrently to investors in Hong Kong equities alongside a dark liquidity-seeking algorithm, SuperX, that promises best-execution access to other Asian 'dark pools'.
Both services will be channelled through Deutsche Bank's equity sales desk, portfolio trading desk or the German bank's Autobahn Equity e-trading platform.
Greg Lee, head of Autobahn Equity, Asia says: "Introducing SuperX simultaneously with Dbats gives our clients a unique way to access dark liquidity with a high degree of trade control and anti-gaming protection. We aim to grow SuperX into Asia's leading source of dark liquidity."
The SuperX algorithm uses a quantitative approach to anti-gaming to prevent client orders being traded at artificially adverse prices, says Lee.
SuperX, which is already available in Europe and the US, deploys a pool ranking model that ranks liquidity on a real-time and historic basis to determine optimal dark sources for a given order; a smart allocation model that balances optimal fill probability versus the total cost of execution; and performance reports that allows clients to monitor the efficiency of their execution.
Asian markets, which have so far lagged behind their anglo-saxon counteparts in embracing dark pool trading, provide fresh territory for dark pool trading operators.
Deutsche Bank's move comes a week after Citigrouop announced plans to offer dark pool trading in Singapore following a strong showing in its Australian crossing network in June. Both Goldman Sachs and UBS initiated dark pool trading in Hong Kong last year.
Deutsche Bank says it plans to roll out the Dbats and SuperX offering to Australia, Japan and Singapore following its debut in Hong Kong.