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Stock Manipulation news - jft310 - 07-13-2013
By JACOB BUNGE
U.S. stock-market regulators approved a plan for new rules requiring private trading venues such as "dark pools" to disclose and detail trading activity on their platforms.
The move would give market authorities their clearest view yet into private markets that claim a growing slice of daily stock dealing and would help police potentially abusive trading practices, according to regulators.
The Financial Industry Regulatory Authority's staff are expected to propose the new regulations in the coming weeks, and the Securities and Exchange Commission will need to approve them.
The effort is "a real positive step from a market-integrity standpoint," said Richard Ketchum, chief executive of Finra, in a report to members issued late Thursday.
The report came after the Washington-based regulator's board of governors earlier in the day approved plans for rules that will require alternative trading systems like dark pools to report trading activity on a stock-by-stock basis to Finra each week, which will be published on a Finra website.
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Rules will also be proposed requiring dark pools to identify trades that take place on their platforms so regulators can distinguish them from trades made on other venues, potentially helping Finra sniff out attempted market manipulation, according to Mr. Ketchum.
Finra's deeper look into dark pools—platforms run by banks and broker-dealers that match up trades anonymously—comes as regulators work to beef up surveillance and controls for electronic trading practices that have come to dominate most markets.
Dark pools process about 15% of daily stock trading in the U.S., according to research by Rosenblatt Securities Inc., triple their total five years ago. Traders use the platforms to carry out big trades without alerting faster-moving rivals, and to help avoid paying fees charged for trading on exchanges.
The platforms' growing role has drawn scrutiny from regulators, who have brought action against some dark pools recently. The Securities and Exchange Commission in 2011 fined Pipeline Trading Systems LLC $1 million for not disclosing that one of its trading units handled most customer business, and last year the SEC settled with another dark pool, Level ATS, over charges that customer information was shared with an outside firm. The operators of Pipeline and Level ATS neither admitted nor denied wrongdoing.
Many dark pools voluntarily report trading volumes to researchers at Rosenblatt and other firms, but some of the industry's biggest players don't.
A move by Credit Suisse AG earlier this year to stop disclosing activity for its dark pool—one of the industry's most heavily trafficked—caught regulators' attention and played into the decision to propose disclosure rules, according to people close to the discussions. A representative for Credit Suisse had no immediate comment
RE: Stock Manipulation news - admin - 07-14-2013
Good!
RE: Stock Manipulation news - sydbod - 07-14-2013
Totally agree. About time we got more transparency in the market.