Credit Suisse Securities will begin operating a new stock market aimed at mutual funds and other long-term investors that it will call the Light Pool.
The Light Pool will conduct open trading in U.S.-listed stocks. Credit Suisse currently operates the world's largest dark pool for anonymous trading in stocks, according to Bloomberg, which reported on the broker's launch plans.
The Light Pool will be the first electronic communications network in five years to begin operating in the United States. The pool is aimed at institutional investors such as mutual funds, hedge funds, pensions and endowments.
The Light Pool will "employ a system to classify users by how they trade as a way to set prices and keep out unwanted speculators,'' Bloomberg reported.
“There’s a real need for a new kind of displayed market where all the rules are set with long-term investors in mind,” Mathisson told Bloomberg.
The poll will automatically match buy and sell requests and compete with the New York Stock Exchange and Nasdaq Stock Market.
Credit Suisse already operates Crossfinder, an active dark pool. That system traded 2.8 percent of U.S. equities volume, or nearly as much as the next two largest darkest pools, Sigma X from New York-based Goldman Sachs Group Inc. and Getco Execution Services in Chicago, Bloomberg said citing a Dec. 21 report from Rosenblatt Securities Inc.
The long-term market will attempt to create an environment that does not favor high-frequency trading, which now accounts for somewhere between half and 70 percent of equities trading in the United States, depending on the estimate.
The Light Pool is slated to open in March.