Reuters
* More than 300 traders connected to anonymous venue-CEO
* The dozens of U.S. dark pools face an SEC crackdown
NEW YORK, Feb 10 (Reuters) - Pragma Securities, a U.S. trading systems provider, on Wednesday launched an anonymous trading venue known as a dark pool in an already crowded landscape that faces regulatory changes.
The company hopes its so-called ONECROSS pool will attract a wide range of broker-dealers and institutional investors looking to trade equities, particularly near the open and close of markets. Pragma Chief Executive Doug Rivelli said in an interview more than 300 traders were connected to the system.
Traders increasingly use dark pools to hide their trading intentions from the wider marketplace. Numbering more than 40 in the United States, the exchange alternatives have come under increased regulatory scrutiny amid concerns they erode the accuracy of displayed prices.
The U.S. Securities and Exchange Commission has proposed rule changes that would shed more light on the dark pools, and likely transfer some trading to exchanges. [ID:nN21498280]
Rivelli said ONECROSS will not use so-called actionable indications of interest, or IOIs, which the SEC wants to treat like regular quotes.
"This is an example where we are now providing clients with a source of liquidity that they didn't previously have," he said. "I view what we're doing as highly innovative."
The CEO expects that orders in the dark pool will be larger than those matched on the displayed U.S. markets, such as the Nasdaq stock market and New York Stock Exchange.
The pool will run a continuous dark market based on public prices for about 1-1/2 hours before the open of traditional markets, and another through the trading day that expires about 30 minutes before the close. Traders will have the option to cancel orders before they are executed.
Pragma, a New York-based provider of trading technology and services, has an execution partnership with brokerage Weeden & Co, according to its website. (Reporting by Jonathan Spicer; Editing by Steve Orlofsky)
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