Firstly thanks to everyone who has emailed me with such

positive responses to the Fragulator. Thousands of fragulations

have taken place on the site since Friday and it's

great to know that so many of you are finding it

useful.

We've had all sorts of

interesting feedback, especially in terms of the classifications

we have chosen and the different levels of reporting

transparency. A full guide to the different trade types can be

found on the

href="http://fragmentation.fidessa.com/faq/#tradetypes"

target="_blank">FAQ page but basically we still

classify a trade as lit provided that at least one side came from

a lit order book. So, for example, a dark order that interacts

with a lit order is still classified as a lit trade. You can see

this in the Fragulator tables which separate out dark to dark

interactions at Chi-Delta or Turquoise from other trades in their

lit books.

The bigger issue, though, is one of

transparency and the fact that dark and other non-lit venues

observe completely different levels of transparency. The

activities of the big broker dark pools have especially come in

for some stick in this area and I know that the primary exchanges

are crying foul at the regulators over this. Basically, their

view is that if you act like an exchange (i.e. by matching

orders), then you should have to report like an exchange. The

risk they claim is that, without a level playing field,

transparency goes down and Europe potentially becomes a dealer

market - neither of which were the intended consequences of

MiFID. On the other hand, the brokers claim that they are

providing a very necessary liquidity operation by allowing

traders to interact in their dark pools in different ways. It all

seems like the next chapter in a subtle power play between the

big exchanges on one side and the big banks and brokers on the

other.

Meanwhile, the folks at CESR are

getting lobbied from all sides on what is best for the market.

For more information on this you might want to look at title="FT Trading Room"

href="http://www.ft.com/cms/4683c1ac-71fd-11de-b7e1-00144feabdc0.html"

target="_blank">FT Trading room which features a

video interview with a certain shiny headed industry

observer.

It seems certain, though, that more

regulation is on the way. With this in mind it's

interesting to note the sudden outbreak of accord between the LSE

and the big banks over Turquoise. Maybe it's recognition that

these participants would rather sort out their own issues than

have the regulators do it for them.