SEC approves disclosures for "dark pools’
New disclosures would be required for alternative trading systems known as “dark pools” under proposals that the Securities and Exchange Commission unanimously approved last week.
New disclosures would be required for alternative trading systems known as “dark pools” under proposals that the Securities and Exchange Commission unanimously approved last week.
The largest dark pools are private trading systems sponsored by securities firms to execute the orders of their customers and their proprietary orders outside public markets.
These dark pools have grown in recent years to represent a significant source of liquidity in U.S.-listed stocks.
The proposals approved by the five-member commission focus on dark pools that transmit electronic messages to a limited group of market participants. The messages signal that the dark pool has an interest in buying or selling a security.
“Participants in these private pools have access to information about a trade which other investors are denied,” SEC Chairman Mary Schapiro said in a statement. “What’s more, these participants are able to use and rely upon the prices provided by the publicly displayed markets, without contributing information on their own.”
E-mail Sara Hansard at [email protected].
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