The three largest U.S. stock exchanges have called on market
regulators to formulate tougher rules for private share-trading
venues, including so-called "dark pools."
NYSE Euronext (NYX), Nasdaq OMX Group Inc. (NDAQ) and BATS
Global Markets urged the Securities and Exchange Commission to
adopt a rule that would force such private market operators to
provide more competitive prices on trades than are available on
exchanges, part of a broader effort by exchanges to reclaim
business ceded to such platforms in recent years.
Chief executives of the three exchanges pushed for such a
so-called "trade-at" rule at a meeting last week with SEC officials
including Commissioner Elisse Walter, according to a copy of the
presentation filed with the agency.
Exchanges for years have called for tougher restrictions on dark
pools--private, electronic markets where investors can deal shares
anonymously. The rise of such platforms has chipped away at
exchanges' business of matching stock trades, driving them to
expand into other areas such as derivatives and selling trading
technology.
The new joint push for the rule, which could sweep large amounts
of trading back onto their markets, represents U.S. stock
exchanges' strongest call yet for regulators to rein in trade on
dark pools, many of which are run by banks and brokers that count
as major customers of exchanges.
The effort comes as the level of U.S. shares traded away from
exchanges earlier this year hit an all-time high. So far this month
more than 35% of the overall market has been traded on private
platforms, according to data from BATS.
U.S. exchange officials have also highlighted moves by
regulators in Canada and Australia over the past year to implement
their own curbs around off-exchange share trading.
Representatives for NYSE and BATS in statements expressed
"collective concern" around the rising activity in private markets.
Nasdaq had no immediate comment.
An SEC spokesman said officials "look forward to continuing the
dialogue on these issues with all the affected stakeholders."
Write to Jacob Bunge at jacob.bunge@dowjones.com
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