NEW YORK Wall Street's self-funded watchdog said on Wednesday it may cut the fees it charges to professional users, like banks, of its weekly report on off-exchange trading volumes in order to make the information more accessible following industry complaints.
"We are looking hard at reducing or eliminating those fees," Richard Ketchum, chief executive officer of The Financial Industry Regulatory Authority (FINRA), said at the Reuters Wealth Management Summit.
FINRA began reporting weekly data on alternative trading systems (ATSs) a year ago, allowing investors to see for the first time the amount of trading that happens in each of nearly 40 ATSs, most of which are "dark pools" that do not display trading information until after trades have been executed.
Prior to that, post-trade ATS data did not indicate to which firms the trades were attributed or what types of dark pools were most used.
The move was aimed at increasing transparency in the markets and improving investor confidence as more trading moved away from traditional stock exchanges like the Nasdaq (NDAQ.O) and the New York Stock Exchange (ICE.N). Nearly 40 percent of U.S. stock trades now happen away from exchanges in bank- or broker-run trading venues, compared to around 16 percent in 2008.
Non-professional investors can access FINRA's ATS data for free, but professionals and vendors have to pay $12,000 a year to view it and cannot distribute the data, or information derived from that data, to third parties.
Investors can use the information to better determine where to route their orders, but firms that run ATSs have complained that they cannot use the data to show their clients how they stack up against other trading venues.
"We do think the information is valuable," said Ketchum. "But we don’t think there should be significant bars to it so we are looking hard at that," he said of the fees.
FINRA also plans to begin adding trade execution data to the reports from firms that buy stock orders from retail brokerages and trade against them internally, he said.
The biggest dark pools are run by Credit Suisse Group AG CSGN.VX, UBS AG UBSN.S, IEX Group, and Morgan Stanley (MS.N).
Separately, Ketchum said FINRA is crafting guidance that would give brokers clarity about delaying transactions made by investors who they believe may be suffering from dementia or are being influenced by caregivers.
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(Reporting by John McCrank; Editing by Nick Zieminski)
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