TY  - UNPD
A1  - Johann, Thomas
A1  - Putniņš, Tālis
A1  - Sagade, Satchit
A1  - Westheide, Christian
T1  - Quasi-dark trading : the effects of banning dark pools in a
world of many alternatives
T2  - SAFE working paper series ; No. 253
N2  - We show that "quasi-dark" trading venues, i.e., markets with somewhat non-transparent trading mechanisms, are important parts of modern equity market structure alongside lit markets and dark pools. Using the European MiFID II regulation as a quasi-natural experiment, we find that dark pool bans lead to (i) volume spill-overs into quasi-dark trading mechanisms including periodic auctions and order internalization systems; (ii) little volume returning to transparent public markets; and consequently, (iii) a negligible impact on market liquidity and short-term price efficiency. These results show that quasi-dark markets serve as close substitutes for dark pools and consequently mitigate the effectiveness of dark pool regulation. Our findings highlight the need for a broader approach to transparency regulation in modern markets that takes into consideration the many alternative forms of quasi-dark trading.
T3  - SAFE working paper - 253 
KW  - Dark Pools
KW  - Dark Trading
KW  - Liquidity
KW  - Price Efficiency
KW  - MiFID II
KW  - Double Volume Caps
Y1  - 2019
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/50442
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-504422
IS  - This version: April 30, 2019 Preliminary and incomplete.
PB  - SAFE
CY  - Frankfurt am Main
ER  -