FT: “In his strongest statements on the need for overhauling the equity markets, Nasdaq OMX chief executive Bob Greifeld said on Monday that “dark pools” have become perverted, while a key regulation aimed at improving the markets by requiring investors to receive the best price has become meaningless.”
“Mr Greifeld, who was speaking at a market structure roundtable, has not been as vocal as other industry players, such as Jeffrey Sprecher, chief executive of IntercontinentalExchange, who has called for the elimination of the prevailing maker-taker model.Barclays defends ‘dark pool’ venue
The integrity of the markets has become a controversial issue and the scrutiny has intensified since the publication of Michael Lewis’s book Flash Boys, which said the markets are rigged. Mary Jo White, chair of the Securities and Exchange Commission, recently announced sweeping recommendations to increase transparency in the markets.
Dark pools have become a particular focus because prices are only posted after a trade has been executed. The venues serve a legitimate purpose in facilitating large block orders for institutional investors, but the average trade size in dark pools is 187 shares, Mr Greifeld said.
“It’s a perversion. Something is not working,” he said, adding that the regulation for alternative trading systems, which include dark pools, “needs to be restored to its original purpose”.
Future Today
