Abstract
Dark Pools of liquidity, Crossing Networks or Alternative Trading Systems (ATS) are essentially networks that provide an opportunity to Institutional Clients to trade large blocks of share anonymously and without affecting the broader market. Dark pools have proliferated in the US over the last few years and it is estimated that there are close to 40 liquidity sources operating in the market. The general consensus is that although the volume of trading will keep on growing, there will be consolidation in the market and only a handful of players will remain. TABB Group predicts that by the year 2010 trading volumes on the dark pools will be close to 15% of the total market share. Threatened by the loss of big trading volumes, the big exchanges like NYSE and NASDAQ have also introduced their own crossing networks to attract some of the traffic back. This paper discusses the evolution of dark pools and crossing networks, their relevancy in the financial services industry, and what changes can be expected in them with the onset of RegNMS.

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