US beefs up oversight of dark pool trade

City A.M. Reporter
AN industry-funded watchdog for the US securities industry is seeking to bolster its monitoring of stock transactions in dark pools at a time when the alternative trading systems have come under greater scrutiny.

The Financial Industry Regulatory Authority (Finra) will seek approval from the Securities and Exchange Commission to obtain information on trading volumes, on a weekly basis, from dark pools and all other alternative trading systems, known as ATS.

Finra also plans to require each ATS to use a unique identifier when it reports order or trade information, the watchdog said in a statement on its website.

The rules would require ATS to report total trading volume, by security, to Finra, which would then post that information on its website. Currently there is no public dissemination of ATS data.

In April, the chief executives of three US exchanges met with regulators in Washington to express concerns about increased trading taking place away from public markets. Off-exchange trading has approached almost 40 per cent of US stock activity trading volume at times this year