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Enhancing Our Equity Market Structure - Speech from US Securities and Exchange Commission chair Mary Jo White

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The Australian Securities and Investments Commission (ASIC) is Australia's corporate, markets and financial services regulator. An independent government body, its priorities are to ensure confident and informed investors and financial consumers, fair and efficient financial markets, and efficient registration and licensing.

Dark trading is trading that occurs without pre-trade transparency. Although dark trading has always been a feature of equity markets, in recent years markets around the world have exhibited substantial growth in the level of dark trading and a change in the manner in which dark trading takes place. New trading venues, known as dark pools, have emerged. These venues systematically match orders without providing any pre-trade transparency and without providing access to this liquidity to the market at large. Dark pools are also typically subject to less regulatory scrutiny than traditional stock exchanges.

The first WFE events in the Year of Snake appropriately took place in the Asia / Pacific region with visits to exchanges interested in joining the Federation, as well as a meeting open to all members as the Working Committee reviewed priorities for 2013.


Liquidity refers to the speed and cost of buying and selling (ie. liquidating) securities in the market. A liquid market is one in which a security can be bought or sold quickly and at a low transaction cost. There are at least 2 theories which predict the impact of the operation of competing execution venues such as dark pools on market liquidity. Interestingly, they provide conflicting predictions. 

The following article is an edited excerpt from the year-in-review issues of Rosenblatt Securities’ Let There Be Light reports on dark-pool volumes and trends. Rosenblatt publishes a US and European edition of LTBL each month for its clients. The reports marry often hard-to-obtain volume data for dark pools in both regions with analysis of what is driving activity in these venues.