The new dark pool for fund managers announced by Fidelity Investments and others is the latest attempt to bring transparency to part of the market seen as cloaked in secrecy. Fidelity, BlackRock and seven other asset managers unveiled Luminex, an industry-owned dark pool where they say the biggest investors will know the rules and be kept free of interference from speculators. The venture follows a year in which the reputations of private electronic equity venues suffered as regulators uncovered evidence of deception. While ambitious, the model described by the fund companies bears resemblances to venues already in operation, in particular the one run by Liquidnet Holdings. That platform, opened in 2001 by Seth Merrin and serving about 760 fund companies in 43 markets worldwide, ranked 20th among the biggest American dark pools by volume, the latest data showed. "It would be wonderful if everybody put all their eggs in the Liquidnet basket," Merrin said. "We look at this as them throwing their hands up in the air and saying 'we're fed up with this market structure', 'we're fed up with the shenanigans'." At Liquidnet, the average size of trades is more than 40,000 shares, about 200 times greater than those found on most venues. The platform has found a niche as a crossing network where the biggest investors wait for counterparties to show up with orders that match theirs. That model stands in contrast to most of the US equity landscape, where market makers intermediate trades between investors who want to do business right away. Liquidnet did just over 22 million shares in the week of December 29, according to the Financial Industry Regulatory Authority. The two biggest dark pools, both run by brokerages, did almost 10 times that. The regulator's figures only include trading of the biggest US stocks. "There's always room for intermediation because most stocks are not going to find their natural other side," Merrin said. "What they are saying is that the regulations and current solutions out there are not doing enough to help their specific business." IEX Group, made famous by Michael Lewis' Flash Boys book, is owned by a consortium including hedge funds and mutual funds. It opened for business on October 25, 2013, and its share of total US equity trading hit 1 per cent in November. The Luminex venue will admit asset managers who are looking to trade a large quantity of shares at once, according to a statement. Fidelity began to discuss setting up the venue more than a year ago. Fidelity, Bank of New York Mellon, BlackRock and others are billing the platform as a place where the original purpose of dark pools will go on without interference. UBS and Barclays have been accused in recent months of catering their dark pools to high-frequency traders. "The ultimate beneficiary of what we're doing would be the end customer, the shareholder of the fund," said Michael Cashel, the interim chief executive of Luminex. Dark pools have come under increasing scrutiny in the past year. Last week, the Securities and Exchange Commission hit UBS with a record fine on a dark pool for failing to follow rules designed to ensure stock trades are executed fairly. New York attorney general Eric Schneiderman sued Barclays in New York State Supreme Court in June, accusing it of lying to customers and hiding the role of high-frequency traders in its dark pool. The bank in July filed papers asking the court to throw out the case, arguing the state had not shown that clients had been harmed. In response to the pressure, dark-pool operators have been disclosing their previously hidden rules of operation and regularly publishing trading volumes through the Financial Industry Regulatory Authority. The new venue will require traders to commit to a minimum block size when entering orders to buy or sell stocks. If there is a match with another party, the trade must be executed, though customers will be able to increase the order before a transaction takes place. The preliminary plan was to have a threshold of 5,000 shares or US$100,000 in value, whichever was smaller, though that might change, Cashel said. The platform will also disclose the names of all the firms that are trading and initially at least will not allow any broker-dealers. The cost of transactions will be lower than similar venues in the market, though Cashel would not provide details. Luminex hoped to start trading in the second half of the year, he said.