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The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) are seeking comment on a joint consultation paper on the role of dark liquidity pools.

Entitled Dark Pools, Dark Orders and Other Developments in Market Structure in Canada, the paper raises concerns about the interaction between transparent orders and dark orders, which often coexist on the same trading platform.

“The structure of our capital markets is constantly evolving,” says Susan Wolburgh Jenah, president and CEO of IIROC. “Given our mandate to protect investors, we want to ensure that all of the issues raised in the paper are explored.”

Dark pools and dark orders are used by institutional investors in an effort to avoid moving the market with large orders of a single security.

Trading dark orders on the same exchange or alternative trading system as fully transparent retail orders gives an advantage to those placing dark orders.

The consultation paper is available on all provincial securities commission websites. To read it, click here.

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Investor confidence down

Investors are playing it safe for now.

According to results of the State Street Investor Confidence Index for September, Global Investor Confidence fell by 4.7 points to 118.1 from a revised August level of 122.8. Regionally, there was some divergence in risk appetite.

The confidence of North American institutional investors declined slightly by 4.6 points from 118.3 to 113.7. Elsewhere, however, the tone was more upbeat. European Investor Confidence rose from a revised 109.3 to 110.9, while Asian Investor Confidence increased from a revised 91.9 to 93.1.

“After eight consecutive increases in Global Investor Confidence, which took the Index from an all-time low of 82.1 during the financial crisis to a five-year high of 122.8, institutional investors took a breather this month and consolidated their holdings of risky assets,” said Harvard University professor Ken Froot, one of the developers of the State Street Investor Confidence Index. “This month’s reading of 118.1 is still comfortably in the range associated with the accumulation of risk exposures, as a reading of 100 signifies neither accumulation nor decumulation. However, there is a recognition that a portion of the recent rise in global equity prices can be attributed to liquidity expansion rather than fundamental opportunities. Institutional investors are pausing to assess this balance.”

Developed through State Street Global Markets’ research partnership, State Street Associates, by Harvard University professor Ken Froot and State Street Associates Director Paul O’Connell, the State Street Investor Confidence Index measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors.

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FPSC introduces Financial Planning Week

Financial Planners Standards Council (FPSC) has declared October 5-12 as “Financial Planning Week”. The goal of the FPSC is to make financial planning more a part of Canadians’ lives by raising awareness and inviting all stakeholders to collaborate and bring about change.

“Financial Planning Week is every day at FPSC and for many involved in the profession — but for too many Canadians there are not nearly enough days or lives lived with financial planning as a priority. This year more than ever, the impact of this void has hit Canadians hard and it must change,” says Cary List, president and CEO of Financial Planners Standards Council.

For more information log on to the FPW 09 Website at www.financialplanningweek.ca.

(09/30/09)