Dark Pool Luminex Hires BlackRock Executive Clark as CEO

Updated on

Luminex Trading & Analytics LLC, the dark-pool operator owned by some of the world’s biggest asset managers, has hired Jonathan Clark as its chief executive officer, according to a company statement.

Clark will join Aug. 1 from BlackRock Inc., where he is co-head of equities trading for the Americas. He had been a vice president at Merrill Lynch Investment Management, joining BlackRock when it acquired the unit in 2006. BlackRock has a stake in Luminex, which aims to open its trading venue late in the third quarter. Once he receives regulatory approval, Clark will become the company’s first permanent CEO.

The backers of Boston-based Luminex, who together manage more than $8 trillion of assets, created the company earlier this year because of the difficulty of trading large blocks in existing stock markets. The average size of a trade is 200 shares, according to a study by the Securities and Exchange Commission. Luminex’s owners also include Fidelity Investments, JPMorgan Chase & Co.’s asset-management arm and Invesco Ltd.

“Jon’s unique insights, proven track record in building efficient trading operations and perspective on the challenges facing participants in today’s markets are a perfect fit for Luminex,” Michael Cashel, the interim CEO, said in the statement. “We are confident under his leadership, Luminex will become an attractive option for investment managers.”

Clark will join as president and take the CEO title once he gains the necessary licenses, the statement said.

Fidelity began more than a year ago to discuss setting up the venue, which will admit asset managers who want to trade large quantities of shares all at once, according to its website.

No Interference

Fidelity, BlackRock and the other founders are presenting Luminex as a place where the original purpose of dark pools will go on without interference. UBS Group AG and Barclays Plc have in the past year been accused by regulators of catering their dark pools to high-frequency traders and misleading clients. Barclays is contesting the claims in court, while UBS settled with the SEC earlier this year without admitting or denying guilt.

The new venue will require traders to commit to a minimum block size when entering orders to buy or sell stocks. If there’s a match with another party, the trade must be executed, though customers will be able to increase their order before the transaction takes place.

Fidelity Project

Hiring a BlackRock executive should help Luminex because it has been viewed as a Fidelity project, Sang Lee, managing partner at research firm Aite Group LLC, said by e-mail. But the platform still faces hurdles, he said.

“We have not yet seen a buy-side-driven initiative that has succeeded,” Lee said. “Perhaps the current market reality has finally created an environment for something like Luminex to take off. Given the stellar names that make up the consortium, this may be the best chance that the buy-side has to potentially shake up the status quo.”

Bloomberg LP, the parent of this news organization, owns a stake in Bids Trading LP, which operates a dark pool geared toward block trading.

Luminex will also disclose the names of all the firms using its platform. It will not allow any broker-dealers to begin with. The cost of transactions will be lower than similar venues in the market, the company said earlier this year. Luminex’s other owners are T. Rowe Price Group Inc., Bank of New York Mellon Corp., Capital Group Cos., MFS Investment Management and State Street Corp.’s State Street Global Advisors.

For more, read this QuickTake: Private Stock Trading vs. Public Exchanges