European dark trading grows despite overall volume dip
European equity market volumes reached the lowest
level yet seen this year in July, but dark trading increased by almost 10%,
according to figures provided by Thomson Reuters.
Total European equity market activity was €667.16
billion in July, down from €691.91 billion in June and €727.97 billion at the
start of this year. At the same time, total dark market activity in July was €28
billion, up from €25.53 billion the previous month – representing 3.83% of
total European equity market share. It also represents a slight increase on the
3.69% dark market share reached last month.
Dark pools had previously lost market share in Europe
due to high volatility. Last month, agency broker Rosenblatt Securities
estimated that the 18 dark venues that it tracks accounted for just 3.09% of
consolidated pan-European value in May, down from 3.29% the month before.
In July, UBS MTF, the dark multilateral trading
facility owned by Swiss bank UBS, held onto its position as the largest
European dark pool with 21.26% market share, down from 24.54% the previous
month. This put it just ahead of Chi Delta, the dark pool owned by BATS Chi-X
Europe, which increased its share from 20.07% to 21.03%, and Goldman Sachs’
SIGMA X MTF, which rose from 12.89% to 13.14%.
Broker-owned platforms have achieved success in recent
dark market share from independent or trading venue-owned dark pools such as
Liquidnet and NYSE Euronext-owned SmartPool. However, the trend faltered this
month, as agency broker and technology provider ITG’s POSIT dark pool saw its
own share erode from 10.87% in June to 9.68% in July, while Liquidnet’s share increased
to 5.54%, up from 4.01% last month.