Inching Toward Dark Pool Reporting

Both Traders Magazine and the Wall Street Journal's MarketBeat blog reported Friday afternoon that Goldman Sachs (GS) Electronic Trading will begin reporting volume executed on its dark pool based on single-counted matched executions. So there is some movement concerning one of the SEC's expressed concerns, namely the lack of uniform reporting standards among dark pools.

Again, more to come on this issue.

"Inching Toward Dark Pool Reporting" (Traders) Excerpt:

Last week Goldman Sachs Electronic Trading told clients it would begin reporting volume executed in Sigma X, its dark pool, based on single-counted matched executions. This is a departure from how Goldman has been calculating Sigma X volume. Dark pool operators generally are now mulling their options after the Securities and Exchange Commission expressed concern over the lack of reporting standards.

"Without an absolute industry protocol, we're advocating doing what exchanges have been doing for a very long time: reporting single-counted matched-only volume," said Dave Johnsen, vice president for Sigma X business development at Goldman. "If everyone else puts themselves on the same metric, the dark-pool numbers will add up to 100 percent of dark-pool volume."

"Light is Coming to Dark Pools" (MarketBeat) Excerpt:

Dark-pool administrators be warned: the regulators are coming.

It may not have been Paul Revere’s historic ride to Lexington and Concord, but recent comments from U.S. Securities and Exchange Commission Chairman Mary Schapiro carried just as loudly to those running non-displayed markets. These opaque trading centers have faced a steady stream of criticism from exchanges, market makers and retail investors, who claim they have been hurt by dark pools’ proliferation. But since these pools provide added liquidity to the market, regulators have been leery to interfere - until now.

Comments

[athena:]

You do not know how correct you are.


On Jun 28 10:10 AM stats wrote:

> WTF. I have been thinking about investing in the stock market for
> a couple of years now. Have been reading everything I can about
> it. Have followed news about the market dillegently in hopes of
> understanding how the system works before I invest. Was just starting
> to get comfortable with my understanding of the market, and then
> this. Investing in the stock market is just too treacherous and
> complicated for the average guy.

Jun 28 10:15 AM

[capt Brian:]

DON"T!!! go out and find u a nice single premium deferred Anuity. Mine matures in 3 years, and guarantees 7.25% minimum, andif the mkt does better, then u can earn more. I defy you to consistantly earn more in the "market". You are investing in the market, but thru experts, who HAVE to perform or lose their job.
In one recent CNBC stock trading contest, I would up in the top 1/10 percent, and it was darned hard, and took nearly all my time away from life. If 7.25% doesn't satisfy you, then hit the horse track.

Happy grins

Capt Brian
The Lost Navigator.


On Jun 28 10:10 AM stats wrote:

> WTF. I have been thinking about investing in the stock market for
> a couple of years now. Have been reading everything I can about it.
> Have followed news about the market dillegently in hopes of understanding
> how the system works before I invest. Was just starting to get comfortable
> with my understanding of the market, and then this. Investing in
> the stock market is just too treacherous and complicated for the
> average guy.

Jun 28 10:55 AM

[The Geoffster:]

Did you say guaranteed? By who, AIG?


On Jun 28 10:55 AM capt Brian wrote:

> DON"T!!! go out and find u a nice single premium deferred Anuity.
> Mine matures in 3 years, and guarantees 7.25% minimum, andif the
> mkt does better, then u can earn more. I defy you to consistantly
> earn more in the "market". You are investing in the market, but
> thru experts, who HAVE to perform or lose their job.
> In one recent CNBC stock trading contest, I would up in the top 1/10
> percent, and it was darned hard, and took nearly all my time away
> from life. If 7.25% doesn't satisfy you, then hit the horse track.
>
>
> Happy grins
>
> Capt Brian
> The Lost Navigator.

Jun 28 11:20 AM

[CautiousInv...:]

I'm not a huge fan of regulation but dark pools, which now account for around 10% of all volume, serve only special interests.

Dark Pools, or Dark Liquidity, as they are sometimes known, have been used more and more by brokers and funds in transacting off market in increasingly greater volume.

Pool operators publish very little about the pools and do not publicize quotes; orders are executed anonymously; some are said to provide early "looks" to some customers; and volume typically goes unreported.

They are perfect venues for insider trading, hiding buyer intentions and market manipulation. And they accomodate the needs of high frequency traders using electronically-based agorithmic platforms.

Traditional financial markets generate liquidity by openly advertising buy and sell interest in a given venue, with real time liquidity data provided by publishing market volume.

I fully expect dark pools to be subjected to more stringent reporting and greater transparency.

Jun 28 01:33 PM

[BerkeleyBob:]

The demise of Executive Life, a long time embarrassment to several California politicians, left the beneficiaries of structured settlements among others in the lurch for a long time. In the present market, a certain return of 7.5% sounds good, but life is never that simple and most financial experts are not enthusiastic about annuities. The reporting of "dark pool" transactions and the movement of money outside of the exchanges is an important issue and increased transparency would probably benefit retail investors over the long run.

Jun 28 05:24 PM