Market Quality Implications of Dark Pools for the UK Economy

How well financial markets perform their key functions of providing liquidity and efficient price discovery affects every individual’s financial well-being in a modern economy. Recent technological advancements have critically altered how markets perform these vital functions and fuelled the growth of new breeds of high-tech securities exchanges, such as dark pools, a type of exchange that offers no pre-trade transparency. Despite concerns about the impact of dark pools in markets and the economy, our research suggests that their emergence have enhanced market quality. This project therefore partners with UK’s financial markets regulator, the Financial Conduct Authority, in order to translate findings from my recent research projects into dark trading-related policy in the UK.