Yes, Dark Liquidity Pools are Hot, as Larry Tabb points out in his column (page 49). Every broker-dealer either has one or is building a crossing network to create one (see March-April AT, "Crossing Over"). There also are the independent players, such as Liquidnet, Posit, NYFIX Millennium and Pipeline, among others. But all these dark books are making life difficult for the buy side. Joan Stack, trading manager for equities for the $70 billion Ohio Public Employees Retirement System, told me that this is a concern for her and her team. "I wish there were a way for my desk to centralize liquidity so I would not have to tap dozens of pools of liquidity. I need to find a highway to liquidity," she said. "It hasn't gotten better with consolidation because as quickly as the ECNs have consolidated, the crossing networks have refractured the markets."

The issue also came up at the SIA Technology Management Conference. Brian Carr, CEO of NYFIX Millennium, told me he understands that this is an issue, and it's one that Millennium is working to solve. Carr explained that Millennium is trying to position its crossing network as the central point among all of the industry's dark liquidity pools/crossing networks. He said he's had conversations with many broker-dealers to make an arrangement wherein if a match can't be found in Millennium, it gives the other dark books the ability to respond. Nothing is set in stone, he said, but it's something the company is pursuing. "Basically, we'd ping other networks to give them the opportunity to respond," Carr related. He said the firm would like to pick up a broker a month on the network so it could act as the central point by the end of the year.

And I'm sure Millennium is not the only crossing network that would like to be that "hub." It would be a delicate position for which the company would need exceptional industry relationships with competitors for it to work. Will this type of scenario be the answer traders like Joan Stack are looking for? I'm not sure, but we'll be exploring this and alternative scenarios in our next issue, so stay tuned. In the meantime, in this issue's "Street Cred," Larry Tabb addresses the good and bad of dark pools.

Speaking of fragmenting markets, buy-side traders may have a problem trading internationally, as MiFID could spur the birth of new European ECNs (see "MiFID: Unintended Consequences," page18). Crossing networks and dark pools could be on the horizon.

On a separate note, pay close attention to this issue's Data & Infrastructure story about the proposed regulation that could eliminate the industry's ability to net trades for reporting purposes. It shocked us how quiet this issue has been, as it could have a tremendous impact on the bottom lines of high-volume traders. I'd love to hear your reaction to this piece and others - e-mail me at kmassaro@cmp.com.