New Canadian Regulations on Dark Pools Protect Institutional Investors

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Apr 16, 2012, 04:19 ET

Regulations Support Existing Structure of Liquidnet

TORONTO, April 16, 2012 /PRNewswire/ - Liquidnet, the global institutional trading network, welcomes the decision by the Canadian regulators, released on Friday (4/13), to ensure that the new Canadian rules on dark pools preserve appropriate protections for institutions seeking to execute large block orders. These protections reflect the existing structure of Liquidnet's offering to pension and other large, long-term investors. The regulations confirm the growing importance of an institutional network to execute large block trades anonymously, securely and without market impact.

"The decision to maintain protections for large block orders directly benefits retirees and millions of other Canadian investors who invest through pension funds and similar investment vehicles. Under the new regulations, institutional investors can continue to benefit from systems like Liquidnet that provide a safe venue for executing large block orders without market impact," said Robert Young, CEO, Liquidnet Canada.

Three key changes of the new regulations include:

Visible order priority - Visible orders will have execution priority over dark orders on the same marketplace at the same price;
Meaningful price improvement - For an order below block size to trade with a dark order, the dark order must provide an execution price better than the displayed quote by one trading increment (typically one cent).
Minimum size - IIROC has the ability to designate a minimize size for dark orders. CSA and IIROC will monitor market developments closely to consider whether and when IIROC should implement a minimum size.

About Liquidnet

Liquidnet is the global institutional trading network that connects equity investors with the liquidity they need- in size, at any time, from anywhere. We go beyond what the retail market can provide by defending and securing the integrity and the anonymity of the block trade. We do this while continuously looking for ways to bring in new sources of safe, actionable liquidity from asset management firms, exchanges, brokers and corporations. Since we launched in 2001, our ability to anticipate and meet institutional demand has allowed us to extend trading to 39 equity markets across five continents for asset management firms who collectively manage US$12.4 trillion. For more information on the Liquidnet community, its liquidity, block executions, and additional investment capabilities, visit www.liquidnet.com.

© 2012 Liquidnet Holdings, Inc. and its subsidiaries. Liquidnet, Inc. is a member of FINRA/SIPC. Liquidnet Europe Limited is authorized and regulated by the Financial Services Authority in the UK, is licensed by the Financial Services Board in South Africa, and is a member of the London Stock Exchange and a remote member of the Warsaw Stock Exchange and SIX Swiss Exchange. Liquidnet Canada Inc. is a member of IIROC and a member of Canadian Investor Protection Fund. Liquidnet Asia Limited is regulated by the Hong Kong Securities and Futures Commission as a licensed dealer and a provider of automated trading services pursuant to the Securities and Futures Ordinance and is regulated by the Monetary Authority of Singapore as a Recognized Market Operator. Liquidnet Japan Inc. is regulated by the Financial Services Agency of Japan and is a member of JSDA/JIPF. Liquidnet Australia Pty Ltd. is a licensed corporation under the Corporations Act of Australia, AFSL number 312525, and is registered as an overseas company in New Zealand, number 2407809.

SOURCE Liquidnet