15 December 2017
visit http://response.ncr.com

SEC to extend dark pool probe

09 October 2009  |  7578 views  |  0 stocks

The Securities and Exchange Commission is to extend its regulatory probing of dark pools to include issues surrounding high frequency trading, direct market access and co-location.

Speaking at a securities conference in Basel, Switzerland, SEC chairman Mary Schapiro reiterated regulatory worries over the expansion of dark pool trading and its impact on transparency and market fragmentation.

"As dark pools divert an increasing volume of order flow away from the public quoting markets, the potential for market fragmentation is a concern," she said. "Also, where there is less publicly-available information about the trading practices of significant markets, there may be more opportunities for information to be leaked only to favored market participants. For these reasons, the SEC is considering whether dark pools need more light."

The SEC has already proposed a ban on flash order types, where users are given an advanced peek at unfilled orders ahead of the wider market.

The regulator is now widening its probe to cover other recent advances in automated trading, said Schapiro.

"We have recently begun an in-depth review of multiple market structure issues given the rapid advancements in technology," she told the conference. "In addition to our recent actions with regard to flash orders and our current focus on dark pools, we will also examine high frequency trading, direct market access and co-location."

Schapiro's remarks came as Thomson Reuters released the results of a poll of 100 buy and sell-side participants on the impact of high-frequency quantitative trading.

While 70% of respondents felt that high frequency trading strategies made execution easier and brought additional liquidity, 63% agreed that the tactic could potentially pose a risk to the market.

Ninety-six per cent of the audience felt that regulators are not fully up to speed regarding the implications of high frequency trading.

Similar sentiments have been expressed this week by the World Federation of Exchanges, which has called for co-ordinated action by regulators to reign in the spread of dark pools.

Speaking at a WFE conference in Vancouver, Federation chairman William Brodsky, said: "We've allowed the technology and the evolution of these markets to run way ahead of the regulators' ability to understand them."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Instinet to launch patent-pending 'aggregated' dark pool

Instinet to launch patent-pending 'aggregated' dark pool

05 October 2009  |  4906 views  |  0 comments
Exchanges call on G20 to tackle dark pools

Exchanges call on G20 to tackle dark pools

23 September 2009  |  7992 views  |  0 comments
EU's MiFID review to look at dark pools

EU's MiFID review to look at dark pools

21 September 2009  |  11778 views  |  0 comments
FSA looks into high-frequency trading and dark pools

FSA looks into high-frequency trading and dark pools

04 August 2009  |  12722 views  |  3 comments
SEC bids to shed light on dark pools

SEC bids to shed light on dark pools

19 June 2009  |  9059 views  |  0 comments

Related company news

 
visit www.thomsonreuters.infovisit www.solutions.lexisnexis.comvisit www.response.ncr.com

Top topics

Most viewed Most shared
Deutsche Bank paper hails 'huge' blockchain potentialDeutsche Bank paper hails 'huge' blockchai...
10177 views comments | 16 tweets | 25 linkedin
satelliteRipple completes XRP Lockup
9240 views comments | 3 tweets | 2 linkedin
PSD2: Laying the regulatory foundation for a new age in paymentsPSD2: Laying the regulatory foundation for...
8885 views comments | 17 tweets | 36 linkedin
Alior Bank to use Open API platform and accelerator to create fintech marketplaceAlior Bank to use Open API platform and ac...
7580 views comments | 20 tweets | 11 linkedin
Australian Government amends AML rules to cover digital currenciesAustralian Government amends AML rules to...
7204 views comments | 15 tweets | 24 linkedin

Featured job

Competitive base, double ote, benefits
London, UK

Find your next job