Credit Suisse, the behemoth of US institutional equity electronic trading, has decided to no longer publish the volume statistics of its Crossfinder dark pool. As the publisher of the LiquidityMatrix, TABB Group has a vested interest in seeing dark pools voluntarily submit their execution statistics to us; however, I will try and address this as an objective observer. In the past there typically have been four main reasons why a dark pool would not submit its volume figures to us:
- A lack of volume or a persistently negative trend in volume.
- A concern that the disclosure would reveal too much about the firm’s operations or client behavior.
- A disagreement over the methodology other dark pools use to count volume (typically this comes down to claiming that much of what happens in some pools is merely a form of routing).
- The company (or division) is inherently secretive and doesn’t want to disclose anything.
All of the 12 dark pools that have not reported to us fit into one or more of the categories above.
Note: ITG reports quarterly.
Source: TABB Group
To understand why Credit Suisse has stopped reporting, we have to also consider why any of the 15 dark pools that have reported execution statistics ever bothered. First, dark pools never submitted their trading statistics for purely altruistic purposes. The LiquidityMatrix is a league table representing the ability of firms to match customer orders in an anonymous fashion at a discounted price. The importance of publicizing numbers has grown over the years. There is correlation between the top dark pools and the top algorithmic providers, so the LiquidityMatrix became a way to help sell execution services.