The head of Hong Kong's stock exchange has warned that the growth of “dark pools”, which facilitate the private trading of large blocks of shares, pose a “systemic risk” to the global financial system and disadvantage retail investors.
The salvo by Ronald Arculli, chairman of Hong Kong Exchanges and Clearing, is the first fired by the territory's bourse since SGX, its Singapore rival, and Chi-X Global announced a dark pool project in August. The Singapore dark pool will let members trade stocks listed in the south-east Asian city state as well as Hong Kong, Australia and Japan.
“Because investors in these pools have access to information about trades that investors using the publicly available quotes do not, this, in effect, creates a two-tiered market and means that the playing field is no longer level,” Mr Arculli said in an address at the territory's Foreign Correspondents' Club.