The Financial Industry Regulatory Authority (FINRA) announced on Wednesday that it intends to discuss potential rule-making initiatives that would seek to increase the transparency of Alternative Trading Systems, including “dark pool” trading among brokers. FINRA will discuss the proposed rules on September 19th.
Alternative Trading Systems, or ATS, consist of regulated fora for matching buyers and sellers for trades that do not occur within an exchange. The name “dark pool” derives from the non-public nature of some of these systems, whereby certain trades occur with little or no information being made available to the public.
FINRA’s new rule-making initiative seeks to increase the transparency of these non-exchange trades so that the public can rest assured that it is receiving the best price in its trading activity. FINRA announced, however, that the potential initiative to expand transparency would not impose any additional reporting requirements on firms.
For the announcement of FINRA’s September 19th agenda, click here.