Dark pool trading is a non-transparent off-market platforms for matching buy and sell orders away from the regulated stock exchanges and created mostly for institutional investors, may not see the light of the day in India.
Dark pools trading forums are not favored to indian market because they are very complex and it is not ideal for India and SEBI prefers complete transparency in all stock market transactions, these off-market platforms are favored as high frequency trading constitute a huge segment of the trades in exchanges, which in turn increases the cost of buy orders and pushing down sale prices.
Dark pools are private electronic trading platforms that operate separately from public exchanges. Institutional investors and traders buy and sell securities in large quantities as they can do so cheaply here. Dark pools are highly prevalent in the USA and Europe but are not very popular in India. As these transactions are conducted outside the main exchanges, there is a certain amount of secrecy surrounding these transactions which is not favored by the SEBI, the Indian Stock Market Regulator.
The SEBI has made it clear that “dark pools” cannot be permitted in India for now as there was no transparency in such activities.