LSE and Lehman’s platform to have ‘dark pool’(market getting more opaque)

The London Stock Exchange will on Thursday unveil a new, pan-European equities trading platform in a joint venture with Lehman Brothers to fight rivals that are eroding its market share.

The move is the first sign that Dame Clara Furse, LSE chief executive, has an aggressive strategy to combat the exchange’s competitors.

The move comes only days after the LSE lost out to its rival NYSE Euronext for a 25 per cent stake in Qatar’s stock exchange and will be welcomed by investors, who have sent the exchange’s shares down over 50 per cent so far this year.

The LSE has seen its market share in UK equities eroded by new trading platforms such as Chi-X, which offer faster trade execution times and are aimed specifically at attracting order flow from computer-driven algorithmic traders.

off-public-market trading venues where banks, hedge funds and institutional investors can trade large blocks of shares in secret, avoiding the risk of alerting others to their strategy and moving the listed price of a stock.

It seems that the relevance of regular stock exchanges are on the way down. How long before great majority of transactions are done off-public in dark pools?

Brief Excerpt: The LSE has also fallen behind other exchanges in moving into so-called ”dark pools” – off-public-market trading venues where banks, hedge funds and institutional investors can trade large blocks of shares in secret, avoiding the risk of alerting others to their strategy and moving the listed price of a stock.
In a crucial move, the venture with Lehman will include a dark pool. This aims to ensure that the LSE takes advantage of a trend towards executing trades off the publicly displayed order book. * * *
Lehman and the LSE declined to comment.

Moving to make thousands of trades in secret does not signal a trend toward renewed investor confidence. This says 'consumer beware.' Secret movement of large blocks of stock by giant investment houses may reveal covert effort to control world stock prices. In fact, these subrosa effort are history making. 'Nuff said.

Methinks somebody in govt ought to do something quick. Ooops ! Perhaps governments already got their marching orders from the Bilderbergers. Double Ooops. The cat's jumped out of the bag.

Yada, Yada, Yada.

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