The Securities Black Market: Dark Pool Trading and the Need for a More Expansive Regulation ATS-N
The Securities Black Market: Dark Pool Trading and the Need for a More Expansive Regulation ATS-N
ABSTRACT
This Note analyzes the effect certain Alternative Trading Systems known as “dark pools” have on the market, as well as how the current regulatory scheme falls short in protecting trade and execution quality. A number of regulatory loopholes have resulted in the creation of an off-exchange securities market, whereby investors can exchange large blocks of securities with delayed public disclosure, reduced market impact, and favorable pricing. While this “dark market” has a number of perceived benefits, its lack of transparency has resulted in an inability for investors to properly evaluate the effect available services have on trade facilitation. As a result, this Note proposes that the recently-proposed Regulation ATS-N be expanded to require that the SEC regularly issue a “quality trade facilitation” rating that rates each pool’s ability to provide quality execution.
AUTHOR
J.D. Candidate, 2017, Vanderbilt University Law School; B.S.B.A., 2014, University of Louisville.