Dark Trading Could Triple in Europe Under New Market Rules
- Trading volumes will flow to bank-run systematic internalizers
- XTX co-CEO sees dark trading rising to 30% from 10% of market
ESMA's Maijoor: MiFID II Aims to Reduce Dark Market
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Trading of European stocks on dark markets will probably triple as a result of the MiFID II overhaul, the opposite of what the architects of the law intended, as the new rules give some venues flexibility in how they price shares.
That’s according to Alex Gerko, co-chief executive officer of XTX Markets Ltd., an algorithmic trading firm that’s one of the region’s largest traders. He predicts that dark trading will become as significant in Europe as it is in the U.S., where more than one-third of stock trades happen on dark markets. As much as 10 percent of European equity trading currently takes place on dark pools, including invisible over-the-counter trades.