Nasdaq Looks To Operate Dark Pools For Banks

After years of fighting for more trading to come back onto stock exchanges, Nasdaq OMX Group Inc. NDAQ, -1.04% is considering joining the dark side.

The exchange operator has approached several of the biggest banks with a proposal to take over the operation of their “dark pools,” and is planning to ask the Securities and Exchange Commission for permission to do so, according to Nasdaq Chief Executive Robert Greifeld.

Dark pools, lightly regulated private trading venues mostly operated by large banks, have come under scrutiny over the past year as regulators seek more details about whether they adequately police trades and disclose enough information to clients.

The company’s new business venture would mark a change of tune of sorts for Nasdaq. Mr. Greifeld—along with the New York Stock Exchange — traditionally has been a critic of the amount of trading on dark pools, arguing that such trading hurts the ability of markets to operate efficiently and facilitate accurate pricing for stocks.

Mr. Greifeld has repeatedly pushed for the SEC to consider implementing a so-called trade-at rule, which would force more trading off of dark pools and onto exchanges. He wrote in an editorial in The Wall Street Journal in July 2014 that “no one can argue against the healing power of transparency in the price-discovery process.”

Source : marketwatch