Proposals on dark and lit markets

Dark markets vs. lit markets is a topic that we discuss a lot over on FierceFinanceIT. But it is of interest to companies beyond the securities trading business. The fact is that your IR guys need to have a handle on the liquidity issues that matter for your firm; short-selling is a great example of something you need to understand. Consider it part of the financial risk management process. You can't stick your head in the sand.

So it is worth noting the SEC's recent moves to better regulate dark trading. It has proposed rules that it sees as an attempt to level the playing field between dark and lit markets. The goal being transparency in all trading in a way that produces the best possible bid and ask. Indications of interest will likely garner more attention as the rule-making process rolls on. Some want stricter limits on these indications, which some see as information on orders that should somehow be made public. Now what would really be interesting is if issuers decided to enter the fray and demand the right to be able to choose how their shares are traded. That would really shake things up. I've long thought issuers need to care more about market structure issues.   

For more:
- here's a Traders article

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The future of dark trading
How far will the SEC's review go?
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Dark pools at risk of new legislation?