U.S. securities regulators are proposing new rules that would require ark pools and other alternative trading systems (ATSs)to make more detailed disclosures about their operations and trading activity.
The U.S. Securities and Exchange Commission (SEC) voted on Wednesday to propose rules that, it says, will both enhance transparency and regulatory oversight of ATSs that trade stocks listed on national securities exchanges.
The proposals would require these trading venues to file detailed disclosures about their operations and the activities of broker-dealer affiliates, including information about trading by brokerage affiliates on the ATS, the types of orders and market data used on the ATS, and the execution and priority procedures of the ATS.
These disclosures would also be made publicly available on the SEC’s website. Public disclosure of this information will allow market participants to better evaluate whether to do business with an ATS, the commission says, and will help them evaluate order handling decisions made by their broker.
“Investors and other market participants need more and better information about how alternative trading systems work,” says Mary Jo White, SEC chairwoman in a statement. “The proposed changes would represent a critical step forward in delivering greater transparency to investors and enhancing equity market structure.”
The SEC is seeking public comment on the proposal for 60 days following its publication in the Federal Register.