Canada regulator OKs Liquidnet corporate debt trading platform

Thu Aug 6, 2015 5:29pm EDT
 
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TORONTO Aug 6 (Reuters) - Canada's main securities regulator has approved a bid by Liquidnet, a global institutional trading network, to operate a dark pool platform in Canada to trade in corporate debt denominated in U.S. dollars or European currencies.

The decision by the Ontario Securities Commission on Thursday will give Canadian investors access to a broad pool of corporate bonds when the fixed-income trading platform is launched in North America and Europe in mid-September, the company said.

Dark pools allow big blocks of securities to be traded anonymously without publicly informing the market until the trades are completed. This minimizes the risk of the price moving to the disadvantage of an investor should the market get wind of the trade before it is executed.

Most Canadian fixed-income trading is conducted among brokers, which can limit liquidity and price discovery.

Robert Young, who heads Liquidnet's Canadian operations, said more than half of the $10 trillion of corporate debt held by institutions is denominated in U.S. and European currencies, and that a growing number of Canadian companies are denominating in foreign currencies to attract a broader base of investors.

Liquidnet says it connects more than 780 of the world's top asset managers. (Reporting by Alastair Sharp; Editing by Peter Galloway)