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Zero Hedge has been the subject of much (welcome) ridicule both retail and institutional , for continuing the barrage of Indication Of Interest screens (also: IOIA tag ) and information for the benefit of our readers, which I have been showing consistently over the past month, ever since I had a feeling there is something peculiar in the advertised trade flow pipes. It never hurts to be proven right. Today, the top trading chief of the Securities and Exchange Commission, James Brigagliano, announced that not only will dark liquidity pools (another topic Zero Hedge has discussed skeptically in the past specifically in the context of liquidity) become the focus of a much broader SEC focus (about time), but also automated Indication of Interest notifications have become "a potential source of concern for regulators."
SEC headquarters in Washington
In a letter to the Securities and Exchange Commission, Morgan Stanley (NYSE:MS) said the SEC needed to reconsider their regulatory proposal, saying it was too “granular.”
Traders Magazine Online News, November 16, 2009 Stephen J Nelson; The Nelson Law Firm, LLC On Oct. 21, the SEC voted unanimously to propose regulations that would increase the transparency of dark pools. The proposed rules have not been released yet by the SEC, but public announcements and congressional testimony by SEC staffers have provided a thumbnail sketch. At the outset, and in the interest of transparency, I hereby disclose that I have no love for dark pools.
On Wednesday, October 21st, the Securities and Exchange Commission (SEC) held an open meeting in Washington, DC to address what it perceives as a growing lack of market transparency with respect to non-displayed venues and the emergence of a "two-tiered" market structure in which in which the public is deprived of information and denied access to liquidity available to institutional traders. At that meeting, the SEC put forth a series of proposals it believes will enhance transparency, reduce asymmetries, and enhance public confidence in the equity markets.
I recently wrote a little piece about CESR, the EU Securities Regulator, and their update to Dark Pools regulations. It got quite a reaction, including feedback from some of the dark pools regulators themselves, who 'corrected' the view that the Best Bid-Offer had been updated by making it clear that nothing had actually changed recently. For example, the document has been updated only to reflect how reference prices are formed in a negotiated trade waiver (Page 11). In fact, the clarification provided for me is that there are various price waivers allowed under MiFID: (1) The Reference Price Waiver This is allowed in various ways: