Alternative liquidity, the likes of which have served to fundamentally transform both the US and European equity trading landscape, is growing rapidly in Asia. But no form of alternative liquidity is growing faster than that of 'dark pools' - a type of off-exchange non-displayed liquidity that has already sparked much controversy among regulators and practitioners in both the US and Europe.
As in the US and Europe, Asian dark pools are being pioneered for the most part by broker dealers and agency brokers, while a number of major Asian exchanges - notably Australia and Singapore - are also poised to launch their own dark offerings in due course. Not all of Asia's major exchanges are embracing dark liquidity however, with the Hong Kong Stock Exchange (HKEx) remaining strongly and loudly sceptical about the phenomenon.
