Chi-X Global and Singapore Exchange have signed a heads of terms agreement to develop and launch the first exchange-backed dark pool in the Asia-Pacific region.
Chi-X Global and Singapore Exchange have signed a heads of terms agreement to develop and launch the first exchange-backed dark pool in the Asia-Pacific region.
The non-displayed trading platform aims to initially offer block crossing facilities for equities listed on SGX, and on an offshore basis for the Australia, Hong Kong and Japan exchanges.
A project implementation team has been formed with the goal of commencing operations and trading in the first half of 2010. The joint venture, which will be equally owned by the two sponsors, intends to implement specific strategies to equip its dark pool with liquidity and attract new capital flows to the region.
The dark pool will operate with appropriate regulatory approvals and controls, reporting, settlement systems and compliance standards.
‘Chi-X is delighted to work with a forward-looking and market-focused partner like SGX to launch and operate this dark pool, with the aim of creating the deepest and most attractive dark pool liquidity in the Asia-Pacific region,’ says John Lowrey, chief executive of Chi-X Global. ‘Our experience has shown that users are looking for independent, genuinely neutral dark pools with high functionality and deep liquidity, and we believe that this joint venture will be able to deliver just that.’
‘SGX is pleased to offer Asia the first exchange-backed dark pool, which will complement exchange trading by reducing the market impact of large trades. We believe it will be an important block trading venue for Asian markets, attracting new participants and improving the trading environment in the region,’ adds Gan Seow Ann, SGX senior executive vice president and head of markets. ‘We are glad to have a strong partner in Chi-X, who shares with us common goals of being innovative and internationally oriented.’
Chi-X subsidiary Chi-X Global Technology, a provider of trading infrastructure solutions to global market centres and participants, will provide the technology for the platform.
SGX-listed stocks will be cleared and settled through The Central Depository, SGX’s securities clearing house and depository, via SGX’s securities clearing members. The JV intends to appoint a pan-Asian central counterparty to clear other trades executed on the dark pool.
