EU ban on free research for trade boosts dark pool operators
Dark pool operators such as Liquidnet have benefited from EU regulation banning buy-side fund managers from receiving free research reports in return for preferential use of particular brokers. The dark pool operators enable matching of block trading via electronic systems giving investors anonymity and allowing them to hide their investment strategy. Liquidnet, the largest Asia Pacific dark pool operator reported $8.99bn of principal traded in Q2, up 27% from last year. CEO Seth Merin attributed the increase to EU regulatory instrument MiFID II requiring global asset management firms with EU exposure to unbundle their research reports and execution fees.

Interview with Seth Merrin, CEO and Founder at Liquidnet. 20OCT16 SCMP / Felix Wong