IOSCO makes dark liquidity recommendations: IOSCO is consulting on principles for regulators to help them control dark pools. The recommendations are designed to:

  • minimise any adverse impact of using dark pools on price discovery;
  • mitigate the effects of any potential fragmentation of information and liquidity;
  • help give regulators information to monitor the use of dark pools and dark orders;
  • help investors get sufficient information to understand how orders will be handled and executed; and
  • increase the monitoring of dark orders and dark pools so regulation can respond to the risks.  

The principles cover:

  • transparency to market participants and issuers;
  • priority of transparent orders;
  • reporting to regulators;
  • information available to market participants about dark pools and dark orders; and
  • regulation of the development of dark pools and dark orders.

IOSCO wants comments by 28 January 2011.