What Happened To Barclays' Dark Pool Volume After It Got Caught

Tyler Durden's picture

In the last week of June Barclays was charged with lying to clients about its Dark Pool, Barclays LX, where instead of preventing HFT algos from frontrunning institutional buyside orders, the criminal bank was in fact allowing and encouraging its predatory, parasite clients to abuse orderflow in any way they saw fit. The motive, if there was any confusion: to become the largest dark pool exchange in the US, filled with HFT scalpers, now that the bulk of other revenue streams for the British company have trickled to a halt.

It almost succeeded: in the week ending June 16 Barclays was second only to Credit Suisse' Crossfinder ATS with 312.1 million total shares traded on some 1.6 million in total trades.

Unfortunately for Barclays it should put its ambitions on permanent halt, because as was revealed today by FINRA's new "ATS Transparency" database, Barclays total dark pool volume has plunged by a whopping 37% to under 200 million shares.

This happened because as reported previously, Deutsche, Credit Suisse, Royal Bank of Canada, and ITG were among several brokers and banks who stopped all order routing to the criminal organization, whose monetary penalty (nobody is deluded that someone may end up going to jail over this) may be enough to force the bank out of the US equity market for good. What worse, since buyside clients all left Barclays in droves it meant that lurking HFTs would get zero benefit from remaining at Barclays as there were no trades left to frontrun.

Which means that the trend shown below, which shows the snapshot for the week of June 23, is about to get a whole lot worse for Barclays as the trickle becomes an avalanche. 

The good news for Barclays LX' competitors is that all those misplaced clients will now have to go to the CrossFinders, the SigmaXs and LavaFlows of the world to find a non-lit venue, where they will once again be HFT fodder and the game repeats anew.

In the meantime, rest in piece dear Barclays equity trading group. And to think of how much effort went into your "Ongoing Commitment To Transparency" Presentation To Clients...

Source: FINRA