LONDON (Alliance News) - A new document posted in the investment banking section of Barclays PLC's website has confirmed that the number of clients using its dark pool has declined since the New York Attorney General filed a lawsuit alleging that the bank gave an unfair advantage to high-frequency traders at the expense of its other investor clients, despite presenting the trading platform as having special safeguards to protect against "predatory" or "toxic" traders.
According to the document, the LX alternative trading system continues to receive and execute client orders, and Barclays is "committed to operating an effective ATS for its clients".
"Since the announcement of the Attorney General?s complaint the number of clients, including several fiduciary clients, using LX has declined. Similarly, the amount of order flow routed to LX also has declined. However, LX continues to receive and execute client orders and Barclays is committed to operating an effective ATS for its clients," the document obtained from Barclays' website reads.
In a separate form, Barclays said that the average daily volume of shares executed in LX ATS in June declined to 82.4 million from 94.6 million in May, but the total shares executed increased to 3.46 billion from 1.99 billion. The average daily notional value of shares traded fell to USD6.27 billion from USD7.08 billion in May. The average trade size in LX increased to 178 shares from 173 shares. Attorney General Eric Schneiderman's lawsuit against the bank came on June 25.
Although May's monthly summary included a table of "execution aggressiveness", on scale from passive to mild to aggressive, June's does not.
A Barclays spokesperson declined to comment on the documents.
The statistics come after the US's Financial Industry Regulatory Authority earlier this week published data showing that the number of NMS Tier 1 equities traded in Barclays' dark pool fell by two-thirds in the week of June 30 from the week of June 23. The number traded in the pool fell to 66.4 million from 197.0 million.
In the week of June 16, immediately prior to the allegations, Barclays' dark pool had been ranked in second place in terms of volumes, with 312.1 million shares traded, only behind the 348.3 million of CROS Credit Suisse Securities (USA) LLC. Barclays was in the week of June 30 in twelfth place, while Credit Suisse still occupied the top spot.
The lawsuit and the fall in volumes come after Barclays put equities trading close to the heart of its investment banking division as part of a revamp unveiled in May to scale the investment banking unit down and make the bank better balanced as a whole.
Barclays shares were Thursday quoted up 0.8% at 212.60 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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Barclays (BARC)