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"We
are looking hard at reducing or eliminating those fees," Richard
Ketchum, chief executive officer of The Financial Industry
Regulatory Authority (FINRA), said at the Reuters Wealth
Management Summit.
FINRA began reporting weekly data on alternative trading systems
(ATSs) a year ago, allowing investors to see for the first time
the amount of trading that happens in each of nearly 40 ATSs,
most of which are "dark pools" that do not display trading
information until after trades have been executed.
Prior to that, post-trade ATS data did not indicate to which
firms the trades were attributed or what types of dark pools
were most used.
The move was aimed at increasing transparency in the markets and
improving investor confidence as more trading moved away from
traditional stock exchanges like the Nasdaq <NDAQ.O> and the New
York Stock Exchange <ICE.N>. Nearly 40 percent of U.S. stock
trades now happen away from exchanges in bank- or broker-run
trading venues, compared to around 16 percent in 2008.
Non-professional investors can access FINRA's ATS data for free,
but professionals and vendors have to pay $12,000 a year to view
it and cannot distribute the data, or information derived from
that data, to third parties.
Investors can use the information to better determine where to
route their orders, but firms that run ATSs have complained that
they cannot use the data to show their clients how they stack up
against other trading venues.
"We do think the information is valuable," said Ketchum. "But we
don’t think there should be significant bars to it so we are
looking hard at that," he said of the fees.
FINRA also plans to begin adding trade execution data to the
reports from firms that buy stock orders from retail brokerages
and trade against them internally, he said.
The biggest dark pools are run by Credit Suisse Group AG <CSGN.VX>,
UBS AG <UBSN.S>, IEX Group, and Morgan Stanley <MS.N>.
Separately, Ketchum said FINRA is crafting guidance that would
give brokers clarity about delaying transactions made by
investors who they believe may be suffering from dementia or are
being influenced by caregivers.
Follow Reuters Summits on Twitter @Reuters_Summits
(For other news from Reuters Wealth Management Summit, click on
http://www.reuters.com/summit/Wealth15)
(Reporting by John McCrank; Editing by Nick Zieminski)
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