Get ready for the regulatory debate to heat up regarding dark pool or nonexchange trading, a practice that currently represents a third of U.S. equity trading and is generally viewed as a benefit to institutional investors seeking to minimize the impact of large block trades, and a possible uptick in trading costs.
With three dark pools or off-exchange venues in the U.S. Pipeline, Level ATS and Liquidnet coming under regulatory fire of late for disclosure issues, questions and concerns continue to be raised about dark pool practices and regulatory changes are expected.
Thats the finding of a new TABB Group report entitled A Spotlight in the Dark: An Inevitable Debate.
Like it or not, we believe the rules surrounding off-exchange trading in U.S. equities will change; it is only a matter of time, says Miranda Mizen, a TABB Group analyst, author of the 18-page report and a former senior vice president of transaction services at the American Stock Exchange.....