Hong Kong securities watchdog to clamp down on ‘dark pools’- sources

Hong Kong’s securities watchdog has warned banks it will clamp-down on exchange trading platforms known as dark pools in a direct fallout from a contentious lawsuit against Barclays Plc (>> Barclays PLC) in the United States, people familiar with the matter told Reuters.

The increased regulatory scrutiny by Hong Kong’s Securities and Futures Commission (SFC) could hurt prospects for the nascent dark trading market in the Asian financial centre and may trigger similar action by other regulators in the region, they added.

Banks in Hong Kong have sought legal advice following a confidential meeting convened by the SFC’s supervisory department last month, during which the watchdog told firms it would step-up scrutiny of dark pool marketing materials, one person said.

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