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January 21, 2010

OES Launches Dark Pool

By Nina Mehta

OES MarketGroup will launch a dark pool called ProSecurities this quarter. The Newark, N.J.-based routing broker provides its 150 broker-dealer customers with access to market centers.

It also provides routing services to exchanges. "We set up an ATS to give us the capability to match order flow going through our systems in addition to routing to exchanges, dark pools and other market centers," said Mike Barth, executive vice president in charge of strategic investments at OES. "We don't plan to be a traditional ATS with liquidity providers and order flow from a lot of subscribers. We wanted to make our routing services more competitive by matching flow internal to our systems."

The dark pool could lower costs for clients. "The catalyst was to increase fill rates, reduce order response latencies and reduce overall costs for our clients," Barth said. Firms that get executions in most dark pools typically pay less for those trades than they would to take liquidity from publicly displayed market centers. Besides routing, OES's services include sponsored access, agency execution brokerage, compliance tools and dark pool liquidity linkages. The firm is a big volume player. It set a record on Sept. 18, 2008, when it processed more than 1 billion total shares and 1 million orders.




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