The London Stock Exchange (LSE) and Lehman Brothers have announced plans to launch a European dark pool.
The pan-European multi-lateral trading facility (MTF) will be named Baikal and, subject to regulatory approval, is expected to launch in the first quarter of 2009, according to an LSE spokesperson.
Baikal will operate as a separate company jointly owned by the LSE and Lehman with other potential investors possible down the road. It will be open to both buy- and sell-side traders to execute European equities across 14 countries and will offer smart order routing to liquidity in at least 22 trading venues.
The LSE spokesperson says the Baikal liquidity pool will be completely dark and orders will be protected by "sophisticated anti-gaming technology." The platform will also offer "a range of order types and customizable liquidity seeking algorithms," says the spokesperson.
A single net settlement service will also be provided for users whether their trades are executed on the Baikal order book or routed out to other venues. The LSE and Lehman will be setting up a Strategic Advisory Committee and working groups in the third quarter to continue the formation and launch of Baikal.
Coincidentally, Baikal is the name of the deepest lake in the world, a freshwater lake located in Asia.