Through a series of bi-lateral agreements, clients can access Goldman Sachs' Sigma X, Morgan Stanley's MS POOL and UBS' PIN via each firm's algorithmic trading offerings.
Will Sterling, managing director, UBS Electronic Trading, says that the firm's new PIN ATS dark pool now has access to the other two firm's pools. "Our algorithmic trading platform now has a FIX connection to these dark pools and our algos have begun accessing them," he says.
Sterling says UBS' algos "learn" the behaviors of different dark pools and therefore route depending on execution performance and other factors. "We expect to see some pretty strong incremental crossing numbers for clients, given the size of these respective dark pools," adds Sterling.
Andrew Silverman, managing director, Morgan Stanley Electronic Trading, says that clients have been asking for help in aggregating dark pool order flow efficiently. "We're dealing with three significant firms that have the same philosophical alignment with regards to their customer base," he says. "We're looking to simplify the buy side execution process in a very complex space.
This similar philosophy boils down to being completely dark, according to Greg Tusar, managing director and head of Goldman Sachs Electronic Trading. He says the three dark pools do not allow any indications of interest (IOIs) or other information sharing within the pools, something that made the agreements possible.
Sterling adds, "In general you trust the confidentiality of the completely anonymous dark pools more, there are some other pools out there that don't have the same criteria in place."
Of course each firm reports that these are not exclusive agreements and they continue to seek out other like-minded pools for even greater client access.