One of the twin towers of the skyscraper headquarters of Deutsche Bank AG stands in Frankfurt, Germany. (Photographer: Alex Kraus/Bloomberg)

What Deutsche Bank's Equities Review Means for a Top Dark Pool

(Bloomberg) -- News that Deutsche Bank AG might pull back in U.S. equities has big implications for its dark pool, the fourth biggest in the country.

Banks often feed client orders to their own dark pools -- private markets that hide the presence of orders until they’re executed. So any pullback from trading U.S. stocks would probably reduce the amount of business taking place on the Deutsche Bank market. A company spokeswoman declined to comment.

Banks started setting up dark pools more than a decade ago to cut costs by avoiding higher fees at exchanges. But it’s gotten more expensive to run markets because of the technology needed to keep them competitive.

Leaders in the ranking have been shifting positions in recent years. Goldman Sachs Group Inc. was once near the top, but has since fallen to about eighth place, according to the weekly tally done by the Financial Industry Regulatory Authority. Goldman has moved up slightly since overhauling its dark pool last year with Nasdaq Inc.’s help

Read more: Goldman Sachs’s waning dark pool revamped to woo more trades

For now, Deutsche Bank is still formulating its plan. The Frankfurt-based lender is considering extensive cuts to its cash equities business in the U.S. as part of a wider restructuring of its investment bank, according to people familiar with the matter. A decision may be made as soon as this week.

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