December 10, 2015

Regulators Propose Rules to Shed Light on Dark Pools

WASHINGTON—Financial regulators are trying to shed more light on dark pools.

The Securities and Exchange Commission decided Wednesday to propose new rules requiring “dark pools”—private trading venues not accessible to the public—and other alternative trading systems to make public detailed information about their operations and activities, bringing that segment of the securities market more under its scrutiny.

The SEC move comes after criticism that regulators have been slow to catch up with changing market technology and have allowed some computer-driven trading systems to operate with little direct oversight, thus harming investors.

Such concerns were intensified by the “flash crash” in May 2010, when markets gyrated wildly amid technology glitches and selling by computer-driven traders.

The current rules governing electronic trading venues largely haven’t been updated since their introduction in 1998.

The proposed rule would require alternative trading systems that trade stocks listed on national exchanges to file a new form to be called ATS-N for “alternative trading systems,” which will then be posted on the SEC’s and companies’ websites.


Read More on the Wall Street Journal