| NEW YORK
NEW YORK May 11 Goldman Sachs Group Inc
will launch a new private stock-trading venue, known as a "dark
pool," on Friday, that is run by exchange operator Nasdaq Inc
, according to a note to clients obtained by Reuters.
Goldman has been refreshing its trading technology to become
more competitive in its electronic stock execution business, and
hired Nasdaq last year to revamp its dark pool, known as Sigma
The new dark pool, called Sigma X2, will ramp up gradually,
with two stock symbols trading on the first day, and the rest
migrated over the course of a month as the old dark pool is
phased out, according to the note sent to clients on Thursday.
A spokeswoman for the investment bank confirmed the contents
of the note.
Nearly every major bank has a dark pool, a trading venue
that does not have to provide information such as trade sizes or
prices to the public prior to trades taking place, with the aim
of getting large orders done with minimal price movement.
Dark pools have historically had less of a regulatory burden
than public exchanges, but in recent years, they have come under
increasing regulatory pressure, driving up legal, compliance,
and technology costs for the firms that run them.
Sigma X2 will be the first dark pool hosted by Nasdaq, using
the exchange operator's technology, operations, and compliance
Nasdaq said last year it was in negotiations with several
brokers to host and run their dark pools, within its data
center, under a white label product called "Ocean."
Sigma X2 will differ Sigma X in that Goldman clients will
eventually be able to interact with the bank's principle trading
flow if they choose, the note said.
The new trading venue will also allow clients that place
orders a better choice of what type of counterparts they match
up with inside the pool.
There are nearly 40 broker-run dark pools in the United
States that compete with 13 public exchanges, including Nasdaq
and Intercontinental Exchange Inc's New York Stock
(Editing by Bernadette Baum)