| NEW YORK
NEW YORK Jan 31 An industry-funded watchdog for
the U.S. securities industry will begin monitoring stock
transactions in off-exchange trading venues in a bid to increase
transparency in the markets.
The Financial Industry Regulatory Authority (FINRA) was
granted approval last week from the U.S. Securities and Exchange
Commission to obtain information on "dark pools," which are
private trading venues, and other alternative trading systems
(ATSs), according to a regulatory filing.
Around 40 percent of U.S. stock trading activity occurs away
from the 13 public securities exchanges, on around 45 ATSs.
The SEC approved rules that would require the systems to
report total trading volume, by security, to FINRA, which will
then post that information on its website.
Currently, there is no public dissemination of such data.
FINRA also plans to require each ATS to use a unique
identifier when it reports order or trade information, the
watchdog said. FINRA said it will use the information to help
monitor ATSs to determine whether they are complying with
In March, FINRA Chief Executive Rick Ketchum said that "dark
pools" have raised significant concerns among investors who are
trying to understand them better and the trading that occurs on
The following month, the chief executives of three U.S.
exchanges met with SEC officials in Washington to express
concerns about increased trading taking place away from public
markets. The exchanges have long argued that the rise of
off-exchange trading distorts prices in the public market and
contributes to less transparent trading activity.