Rebuffing HFT, Nine Buy Sides to Launch Luminex Dark Pool

Fidelity will hold 60 percent of the dark pool, entitled Luminex Trading & Analytics, while BlackRock, Capital Group, MFS Investment Management, Invesco, T. Rowe Price, JP Morgan Asset Management, State Street and BNY Mellon will all be minority shareholders with 4.9 percent, according to a Financial Times report.

Michael Cashel, a senior vice president at Fidelity, will be Luminex's interim chief executive and the trading venue will be operational later this year.

The idea is for Luminex to operate at cost, cutting down on fees, and implement a strict approval process for new funds looking to join to discourage high-frequency traders. As such, all trading on the new venue will have a minimum size.

“Despite significant improvements in the overall efficiency of today’s equity markets, sourcing block liquidity remains a complex and challenging endeavor for investment managers,” Cashel said in a statement. “Luminex is a well-capitalized, independent platform providing a low-cost solution to that challenge while putting investors’ interests first. Our goal is to build trust among users through transparent trading rules and protocols and efficient execution. Investment managers have a responsibility to continuously search for ways to better serve their clients. Luminex facilitates that effort by seeking to deliver a lower cost and more efficient block trading experience to provide improved portfolio performance for investors over the long-term.”

Last week, The Wall Street Journal reported that Nasdaq OMX Group and BATS Global Markets were both interested in running dark pools for banks. Anthony Malakian looked at the state of dark pools in a feature in the September issue of Waters.