Lesrapports.ladocumentationfrancaise.fr/BRP/104000098/0000.pdf. SEC mulls ways to shed light on dark pools. SEC Now Targetting Dark Pools, Indications Of Interests. 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. " The plot thickens From the article: Brigagliano also took aim at dark-pool volume-reporting practices. Print this post. Dark Pool Trade Limit Said to Be Cut 95% in SEC Plan (Update3) - SEC headquarters in Washington Oct. 20 (Bloomberg) -- The U.S. Securities and Exchange Commission will propose toughening its limits on the amount of anonymous trading carried out on stock platforms called dark pools, according to two people familiar with the deliberations.
The commission will propose lowering the amount of daily volume in a company’s shares that can be executed on the networks before prices must be made public to 0.25 percent from 5 percent tomorrow, said the people, who declined to be identified because the discussions weren’t public. John Nester, an SEC spokesman, declined to comment. The rule change may curtail the number of transactions on dark pools, off-exchange platforms run by firms such as Goldman Sachs Group Inc. and Getco LLC that have drawn scrutiny from Democratic Senators Ted Kaufman of Delaware and Charles Schumer of New York.
Concealing Trades The 0.25 percent threshold is smaller than Schumer has proposed. Schumer, Niederauer Knight, ITG Decline. SEC votes for Dark Pool regulation. Morgan Stanley (NYSE:MS): SEC Dark Pool Regulation “Too Granular. 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.” The SEC is looking at dark pools in a more mechanical way, and so looks to regulate in that sense.
For example, they want to treat what is called and actionable indications of interest (IOIs), as an actual quote. Commenting on that way of thinking and potential action, William P. Neuberger and Andrew Silverman, who co-lead the global Morgan Stanley Electronic Trading unit, said, “Morgan Stanley believes that the real, underlying problem that needs to be addressed is the conduct of market participants.” In other words, simply changing a dark pool show of interest into an actual quote does nothing to deal with the underlying behavior generating the indications of interest in the first place.
Unless that is dealt with, mechanical changes won’t help, according to the thoughts of Neuberger and Silverman. With Dark Pool Regulation, Be Careful What You Wish For. Early Thoughts On SEC Dark Pool Regulation by Advanced Trading. More on CESR's Dark Pool Reg. 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: (2)The Negotiated Trade Waiver (this was the change made on March 9th) In this case, the trading system formalises negotiated transactions at or within the volume weighted spread, so that trading participants individually agree on the price and volume of the trade before transmitting it to the trading platform. . (4) The Large-in-Scale Waiver What’s in MiFID Wave 2?
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