By Kirsten Grind 

Big money managers led by Fidelity Investments are close to launching a private trading venue designed to let them buy and sell large blocks of stock without the involvement of Wall Street firms and high-speed traders, according to people familiar with the matter.

Nine firms including BlackRock Inc., Bank of New York Mellon Corp., J.P. Morgan Chase & Co. and T. Rowe Price Group Inc., are forming a company that will operate a "dark pool"--a private trading venue in which activity takes place outside of the public view--the people said.

The effort is unusual for the fund companies because they are rivals, and typically use similar trading venues at big banks, or public exchanges. They have banded together recently out of a shared desire to reform trading by cutting costs and weeding out high-frequency traders, who often have an unfair advantage, according to critics. The companies also have had trouble buying and selling large orders of stock in other pools, these people said. The new venue will require all trades have a minimum share amount.

The Wall Street Journal last spring reported that the effort by Boston-based Fidelity was under way, but it was in the initial development stages and other companies hadn't yet signed on. The project had tentatively been called "Sakura," the Japanese word for cherry blossom.

Now the partnership between the companies has formalized, with Fidelity taking the largest ownership position in the new company and other fund firms holding smaller stakes, these people said. The company is expected to launch in the coming days, and trading will begin later this year. The companies will each have representatives on the board and will work together on decision-making, these people said.

The company that will host the trading venue is now called Luminex Trading & Analytics, which was approved as a broker-dealer by the Financial Industry Regulatory Authority on Dec. 26, according to public documents. Michael Cashel, a senior vice president at Fidelity, will be Luminex's interim chief executive, these people said.

The launch of the company faces some hurdles.

The fund firms will be in direct competition with large banks that use their own dark pools and trading algorithms as ways to persuade firms to use them as brokers. UBS AG, Credit Suisse Group AG and Deutsche Bank AG run the largest dark pools in the U.S., according to data from Finra. Other independent operators such as BIDS Holding L.P. and Liquidnet Holdings Inc. also help facilitate trades between institutional buyers and sellers. About 14.4% of all stock trading took place in dark pools in the first quarter of 2014, according to Tabb Group.

Representatives for UBS, Deutsche Bank and Credit Suisse declined to comment. Spokesmen for BIDS Holding and Liquidnet couldn't be reached for comment.

Nasdaq OMX Group Inc. recently has approached several of the banks to take over operation of their dark pools, and also plans to ask the Securities and Exchange Commission for permission to do so, The Wall Street Journal reported earlier this month.

Fund firms are betting on the new venue to be different, particularly because of the widespread commitment from many large asset managers.

The firms involved together manage many trillions of dollars through mutual funds, 401(k) plans and separate accounts for institutional investors, so the new venue has a higher chance of matching orders quickly and easily, these people said.

Also, the new venue would operate almost at cost, allowing fund firms to save on fees at big banks. Fund firms that wish to join the venue would go through a rigorous process for approval, weeding out high-frequency traders, these people said.

Not all big fund companies have signed on. Absent from the endeavor is Vanguard Group, the country's largest mutual-fund firm with about $3 trillion in assets under management. A Vanguard spokesman declined to comment. Participants of the new venue also don't plan to use it exclusively, according to these people.

The debate over the fairness of trading in U.S. equity markets has been happening for the past several years, in part because of the release last year of the Michael Lewis book "Flash Boys," which claimed the market is rigged in favor of high-frequency traders, banks and exchanges to the detriment of institutional and retail investors.

At Fidelity, with about $2 trillion of assets under management, the effort to form a new trading venue was pushed in part by Chairman Edward C. "Ned" Johnson III, who stepped down as chief executive of the company last year. His daughter, Abigail "Abby" Johnson, has taken his place. Fidelity created a new division to house the project, the Journal has reported.

Dark pools have recently run into trouble. Earlier this month UBS agreed to pay $14.4 million to settle allegations by the SEC that it didn't sufficiently disclose to all its clients how the dark pool worked, creating an uneven playing field. It was the largest penalty ever levied on an alternative trading system.

A spokesman for UBS said in a statement that "issues that led to these chargers were remedied in mid-2012."

Barclays PLC, which once ran one of the biggest such venues, saw its investors and brokers flee last summer after New York Attorney General Eric Schneiderman filed a civil lawsuit accusing the bank of allegedly catering to high-frequency traders even as it promised customers it would protect them.

Barclays has filed a motion to dismiss the complaint. A spokesman said in a statement that it "is based on clear and substantial factual and legal errors."

Bradley Hope contributed to this article.

Write to Kirsten Grind at kirsten.grind@wsj.com

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