Foster, others concerned with 'dark pool trading' convince SEC to act
Following calls for change by U.S. Rep. Bill Foster (D-Dist. 11) and other members of the New Democrat Coalition Financial Services Task Force, the Securities and Exchange Commission (SEC) proposed new rules recently to boost transparency for investors who use alternative trading systems (ATS), also known as "dark pool trading."
The group of legislators wrote to SEC Chairwoman Mary Jo White in June, asking the agency to standardize and increase the information made available to investors who use ATS.
The SEC responded a month later, indicating the agency was developing recommendations to expand the information that ATS must disclose to the SEC and to mandate that ATS make operational data available to investors. The SEC officially proposed a rule recently that would implement these changes.
“The increased transparency will help investors make better-informed decisions and could lower trading costs and increase market liquidity,” Foster said. “As the SEC Chair Mary Jo White has said, the regulatory framework for ATS is largely unchanged since its adoption in 1998.”
Expanding the effort to enhance transparency, Foster and his team have held several meetings with industry leaders and other stakeholders as part of the effort to boost transparency.
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