NYSE Euronext Teams With Dark Pools To Boost Transparency
October 20 2009 - 11:09AM
Dow Jones News
NYSE Euronext (NYX) has teamed with five operators of
alternative-trading systems for a new venture that will pull back
the curtain on trading activity in so-called dark pools.
Dark pools are private venues where large blocks of stock are
traded electronically and have been targeted by regulators seeking
a better idea of how much trading takes place away from
exchanges.
The new venture, announced Tuesday, will next month begin
printing trades on the trade-reporting facility operated by NYSE
Euronext and FINRA, with the daily trading activity of each venue
also be displayed on NYSE Euronext's Web site.
The idea is to shed light on a handful of dark pools that are
estimated to make up as much as 4.5% of the U.S. equity market,
according to a Rosenblatt Securities Inc. report.
"This initiative is an important step toward the standardization
of trade volume reporting across ATS venues," said Frank Troise,
head of equities electronic product for Barclays Capital, in a
statement.
"Industry participants will be able to make more informed
order-placement decisions and thereby improve their execution
quality," he said.
In addition to Barclays, other participants in the venture
include Getco, Goldman Sachs Group Inc. (GS), Knight Capital Group
Inc. (NITE) and UBS AG (UBS). Additional operators of alternative
trading systems are in talks to join up, according to NYSE
Euronext.
Dark pools currently account for around 9% of all U.S. stock
trading, and the Securities and Exchange Commission has targeted
the venues as it takes a closer look at U.S. market structure.
Regulators are seen pushing for standardized volume reporting
for dark pools and new rules that would specify the origin of
trades coming out of the venues.
The SEC on Wednesday is slated to hold a meeting focused on
alternative trading systems' role in the U.S. stock market.
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117;
jacob.bunge@dowjones.com
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