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Dark trading could give local stock market a boost

Jeffrey Tan
Jeffrey Tan11/8/2019 07:00 AM GMT+08  • 5 min read
Dark trading could give local stock market a boost
SINGAPORE (Nov 11): Singapore has been trying hard to reinvigorate its stock market, following the 2013 penny stock saga. Various measures mooted include a dual-class share structure, private-market platforms to build the IPO pipeline and cross-border par
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SINGAPORE (Nov 11): Singapore has been trying hard to reinvigorate its stock market, following the 2013 penny stock saga. Various measures mooted include a dual-class share structure, private-market platforms to build the IPO pipeline and cross-border partnerships. Unfortunately, the trading volume of securities continues to be listless. A growing list of delistings did not help either.

A recent MAS staff paper by the Monetary Authority of Singapore on dark trading could be worth pondering in the light of efforts to rejuvenate the local stock market.

Dark trading refers to trades that are executed off-exchange without the pre-trade transparency of the price and quantity of the orders placed — an example is a married deal. In contrast, normal trades are lit orders submitted to a limit order book of a stock exchange that are visible in terms of price and quantity (pre-trade information) and in real time to all market participants. For dark orders, the pre-trade information is known only to the party originating the order and, depending on the matching method, potentially the counterparty as well.

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