dark pool

Trading Dark Pool Caps Under MiFID II

FlexTrade’s EMS monitors trading in dark pools and large-in-scale orders to ensure compliance with MiFID II regulations.

 

On 3 January 2018, MiFID II compliance will be introduced. Under RTS 3, stocks traded on dark pools under the reference price pre-trade transparency waiver will have caps placed on them. “FlexTrade offers full control over dark pool placement, including automated control and enforcing the various caps orders impacted under RTS 3,” said Andy Mahoney, Head of Sales at FlexTrade.

New Regulation

4% caps will be placed on stocks per venue and an 8% maximum cap per stock on all dark pools combined however dark trades that take pace using the large in scale waiver are not subject to the volume cap.

Our Compliance Solution

“FlexTrade ensures any non-LIS orders will prompt the trader before routing to a dark venue,” continued Mahoney. Any orders that are within a certain threshold of LIS and routed to a dark aggregator will also trigger an alert to the trader.

Additionally, if dark pools are disabled for a given instrument, a notification will appear to notify the trader on the FlexTRADER EMS blotter. This has led to “intelligent blotter scraping” which ensures only LIS eligible orders are being exposed to dark venues.