WHAT DO WE DO ABOUT THE DARK?

It seems that the MiFID review has been with us forever but the debates and discussions continue. In a recent twist, The London Stock Exchange Group, nine trade bodies and four of the world’s largest asset managers have joined forces to try and change some of the key provisions. At the heart are the strict rules on dark pool trading. They are proposing a price improvement rule which ensures trades to be completed at a bid or offer price that is better than that available in the wider public market. It also ensures dark pools offer a benefit over displayed markets. It has been adopted by Canada and Australia and other markets are exploring their options. However, it is draining liquidity out of the system and both countries have seen volumes drop. Is this ultimately a good thing for markets and is there a better way to curb some of the excesses with trading in the dark?