We have surveyed the UK equity marketplace, focusing on dark pools and broker crossing networks, by examining promotional activity and the identification and management of conflicts of interest by dark pool operators.
August 2025 update: This review is historical. See our what we publish[1] page for more information and current views.
Why are we publishing this report?
Equity market dark pools have existed for well over a decade, and are subject to a regulatory framework in the UK that places clear requirements on users and operators of these services. However, dark pools have recently gained increased public attention in respect of price transparency, perceived unfairness and the potential exploitation of some dark pool users by dark pool operators or other more technologically advanced dark pool users. Part of the adverse publicity may reflect a lack of familiarity with regulation, how the markets involved actually function and the assumption that all dark pools are the same. This review explores and seeks to address specific concerns that have been raised in relation to dark pools in the UK equity market.
We examined the promotion undertaken by dark pool operators, where we sought to assess actual delivery versus promises and/or promotional materials proffered; and the quality of the identification, management and disclosure of conflicts of interest by pool operators. In the course of our work, we also reviewed relevant governance, oversight and controls. While not a primary focus, we also comment on the possible impact on firms’ best execution obligations, where relevant, and on some of the infrastructure related to trading in dark pools including smart order routing, crossing logic and technological resilience
This report reflects one of the work streams underpinning the ‘Wholesale financial markets’ priority theme in our Business Plan 2016/17[2].
TR16/5: UK equity market dark pools – Role, promotion and oversight in wholesale markets[3] (PDF)
Who should read this?
The findings and key messages in this report are most pertinent to wholesale market participants, including asset managers, the operators of broker crossing networks and dark multilateral trading facilities, and other firms operating trading venues and exchanges. The report may also be of interest to institutional and individual investors.
What are the next steps?
We encourage both dark pool users and operators to consider our findings and key messages and to assess their own activity in the context of the current regulatory environment.
We also encourage all firms to continue to prepare for forthcoming regulatory changes. Proposed regulations under MiFID II[4] will have a significant impact on the market, especially on broker crossing networks.