• SEC Proposes Regulation of Dark Pools
  • December 16, 2009
  • Law Firm: Winston & Strawn LLP - Chicago Office
  • On November 13, 2009, the Securities and Exchange Commission (the “SEC” or the “Commission”) published a proposal (the “Proposal”) to enhance regulation of so-called “dark pools of liquidity” (generally referred to as “dark pools”) -- alternative trading systems (“ATSs”) that do not display quotations in the publicly disseminated consolidated quotation data. Given the lack of transparency inherent in much of dark pool trading, the SEC is concerned that an increase in such trading could deprive the public of important information regarding stock prices and liquidity. While the SEC recognizes that, over the years, liquidity has existed in various forms that did not provide price transparency or accessibility to all market participants, it is concerned that its rules have not kept pace with the increase in such trading resulting from technological advancements, leading to a conflict with the SEC’s longstanding policy to promote transparent markets.