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Chi-X Europe To Launch Dark Pool

Chi-X Europe announced it will launch the Chi-Delta (Dark Electronic Liquidity Trading Application) dark book in the second quarter of 2009, subject to regulatory approval.

Chi-Delta will be separate from Chi-X Europe’s visible order book, which currently offers hidden order types. Developed in line with MiFID requirements, Chi-Delta will be a non-displayed, reference-pegged order book for orders that don’t meet the Large in Scale order size requirements.

Chi-Delta’s initial pricing will be based on the Primary Best Bid and Offer for reference pricing with European Best Bid and Offer expected to become the source at a later date. Orders will match on a continuous basis with mid-peg, primary-peg and market-pegged orders being supported.

Trade execution fees for orders posted on Chi-Delta will be waived after the launch until August 2009 while Immediate or Cancel (IOC) orders will be charged 0.30 basis points.

In a statement, Hirander Misra, Chief Operating Officer of Chi-X Europe, said, “Many of our trading participants have expressed interest in Chi-X Europe adopting a dual market structure that includes a market for speedy price discovery and a market for non-displayed crossing.”

He added, “We developed Chi-Delta with this in mind, with a goal of helping participants minimize market impact by potentially trading with a natural counter party and limiting information leakage. We continue to look for ways to innovate and we are delighted to provide further choice for our participants through the introduction of our dark order book.”

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