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Themis Paper Spurs Chi-X and BATS to Change Dark Data Practices

"Hard to see, the dark side is." If Frank Oz only knew how appropriate Yoda's comments would be in this galaxy, on Wall Street, and far far away from the Star Wars Universe. (Sorry, I couldn't resist the easy Star Wars reference). According to a Reuters news report, a recent whitepaper from Themis Trading, an independent ag

"Hard to see, the dark side is." If Frank Oz only knew how appropriate Yoda's comments would be in this galaxy, on Wall Street, and far far away from the Star Wars Universe. (Sorry, I couldn't resist the easy Star Wars reference).

According to a Reuters news report, a recent whitepaper from Themis Trading, an independent agency brokerage firm specializing in trading Listed and OTC equities for Institutions, has spurred European investors to shift orders from BATS and Chi-X to Turquoise, Europe's largest dark trading venture (also known as a multilateral trading facility (MTF). Turquoise is controlled by the LSE.

The whitepaper, "Data Theft on Wall Street (PDF)," contends that NASDAQ and BATS were disseminating information that allowed high-frequency traders identify large orders from investors. Themis has issued a number of statements and whitepapers that are critical of high-frequency trading and other practices that Themis contends hurt investors.

In response to the reaction from market participants, both BATS and Chi-X have announced they are changing the way data is disseminated from their dark books, according to the Reuters article. Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio

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