Dark pool trading may see more light in the Australian trading floor as demand is seen to be picking up along side in Europe.

This was the revelation of Tora Trading Services Ltd CEO Robert Dykes in an interview with Bloomberg today from Hong Kong. To be in step with competitors, Tora aims to have a presence in Australia as competitors Deutsche Bank AG and Citigroup have also seen the potential in this market. Citigroup was reported to have seen record sales in its dark pool affiliate in June 2010.

Dykes said that to strengthen its presence in Australia, two key persons would be designated in the Sydney office for client services and the other one for sales before the end of 2010.

Dark pool trading, which allows stock trades without the display of prices and going through the stock exchanges, have attracted more liquidity in advanced developed markets in Singapore, Hong Kong, and now in Australia, Japan, and Europe.

Dykes has estimated that dark pool trading, which primarily espouses lower trading costs, was estimated to grow will account for between 15 percent and 20 percent of Asian trading volume in five years. Just more than 1 percent of equities trading volume in Asia took place off exchanges, compared with 42 percent in the U.S. and about 30 percent in Europe, according to financial industry research and consulting firm Celent, Bloomberg said.

In a recent forum in Macau, Brian Mitchell, global head of dealing and portfolio control at Baring Asset Management, said he was concerned that the lower trading costs espoused by the operators of the dark liquidity pools, which are being supported by the broker community, would not be passed along to the buy side. And the buy side would have to incur increased costs - in terms of more decisions about where to trade - as more dark pools emerged.

Instinet Europe CEO Tony Mackay made a case for the opportunity for substantially lower trading costs through the use of alternative trading systems (ATSs) in general. He claimed that Instinet's Chi-X ATS in Europe was offering 95% lower costs than the London Stock Exchange.

Matt McKeith, head of equity dealing at First State Investments, said it was "nonsense" to suggest that lower trading costs would attract new liquidity to the markets.