Based in Singapore, BlocSec opens in mid-May in Japan and Singapore, with Hong Kong following one week later. Korea and Australia are due to join later in 2008. CLSA will also provide ancillary clearing and settlement as well as assuming intra-counterparty settlement risk.
Users will connect from their order management system, either via Bloomberg or using the BlocSec website. Users are expected to include traditional long-only funds, hedge funds and brokers.
ôWe have removed any way in which the system can be gamed,ö says BlocSecÆs CEO Ned Phillips, who previously worked at ITG and E-Trade. ôWe donÆt show whether a pending order is buy or sell, nor show a price, so there is no fear of giving away a position. It crosses every two seconds, and we donÆt provide DMA (direct market access), and so an order stays in BlocSec until either transacted or removed.ö
It is an agency-only service, and unlike some of the dark pools organised by securities companies, CLSA does not have a proprietary trading desk. BlocSec reckons it is the first provider of block trading in Asia via this liquidity pool. The minimum trade is $1 million on a firm order basis. A number of crossing options are available including mid-point, passive and aggressive, last-close session based, and full-day volume-weighted average price (VWAP).