Chi-X Global and Singapore Exchange (SGX) 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.
Reportedly, 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. It has added that the dark pool will operate with appropriate regulatory approvals and controls, reporting, settlement systems and compliance standards.
Chi-X subsidiary Chi-X Global Technology, a provider of trading infrastructure solutions to global market centers 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 joint venture intends to appoint a pan-Asian central counterparty to clear other trades executed on the dark pool.
Gan Seow Ann, senior executive vice president and head of markets, SGX, said: 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.”
