Wells Fargo to shut its ‘dark pool’ due to falling demand
Wells Fargo (WFC.N) is closing down its alternative trading system, or “dark pool,” due to decreased customer demand, the company said on Thursday.
The San Francisco-based bank will still offer its clients a full suite of electronic trading tools to help them execute orders, but will stop offering access to the company’s dark pool on Friday, a spokeswoman from the bank told Reuters.
“Our products are customized to fit client trading objectives and the products we offer are aligned with client demand. Effective October 17, our product suite no longer includes the Wells Fargo Liquidity Crosser,” the bank said in a statement.
Dark pools are electronic broker-run electronic trading venues, and every big bank has one. They allow investors to trade shares anonymously and only make trading data available after a trade happens, reducing the chance that others in the market will catch wind of the buyer’s or seller’s intentions and move the price against them.
The move by Wells Fargo comes as regulatory scrutiny over dark pools has intensified over concerns about the lack of transparency in the trading venues.
Wells Fargo said the closure of its dark pool was not due to increased regulatory scrutiny, but rather a lack of demand.
Wells Fargo said it would still be routing orders to other dark pools for any customer that wishes it to do so.
Source: Reuters- Wells Fargo to shut its ‘dark pool’ due to falling demand
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