July 30, 2009

Differing Views on “Dark Pools”

Recently, I cautioned how “dark pools” may be one of the next big problems facing our markets. A member – who probably knows more about this area than I do – disagreed and says:

I have a number of friends working for dark pools – and I remember reading some of the initial SEC market reports on stock order preferencing and internalization back in the day that were precursors to this type of trading – and I don’t share your dire opinion. Because in the end, dark pools provide more liquidity and help narrow stock spreads and because, quite frankly, it’s inevitable that automated algorithmic software agents will disintermediate human market makers and specialists.

The biggest problem is that they need to get rid of that name “dark pools” as it sounds like something out of a Harry Potter book – and will one day result in Henry Waxman and Maxine Waters calling for a special House investigation. In the end though, dark pools will get more regulated – not so much because they are bad – but because institutional wholesale traders who made a living “working” large orders by calling up their Ivy League buddies on other trading desks can not, in the long run, compete with the automated algorithms associated with the dark pools so in order to preserve their “buggy whip”-like jobs stricter regulations will be demanded to protect them from the algorithm software engineer menace.

It’s Here: New Edition of Romeo & Dye’s “Section 16 Forms & Filings Handbook”

We just started mailing the new ’09 edition of the popular Romeo & Dye “Section 16 Forms & Filings Handbook,” with numerous new – and critical – samples to those that ordered it. If you don’t try a no-risk trial to the “Romeo & Dye Section 16 Annual Service,” we will not be able to mail this invaluable resource to you. You can use this order form or order online.

The Annual Service not only includes the “Forms & Filings Handbook,” it also includes the popular “Section 16 Deskbook” and the quarterly newsletter, “Section 16 Updates.” Get all three of these publications when you try a no-risk trial to the Romeo & Dye Section 16 Annual Service now.

SEC Offers Its News Via Email

For those of you that don’t feel pounded already with email alerts about breaking news, the SEC recently added a free service where you can subscribe to receive their latest developments via email. You can select from a menu as to what type of news you wish to receive (unfortunately, it doesn’t offer choices by type of law – rather, it’s by the type of document the SEC has released). This builds on pre-existing services that the SEC offers: RSS feeds and Twitter.

So if you had this service, you would have seen Corp Fin Director Meredith Cross’ first written statement since she rejoined the SEC in this testimony – entitled “Protecting Shareholders and Enhancing Public Confidence by Improving Corporate Governance” – that she delivered yesterday to the Senate Banking Committee as soon as it was made available …

By the way, I can’t find a spot to “follow” (ie. sign-up) for the SEC’s Twitter feed on their site. However, you do get the option to do so when you subscribe to their email alerts or you can just do so by going to their Twitter page (they already have over 2700 followers). But most folks provide a link to their Twitter feed on their site or blog, like I do on the top left side of this blog for my Twitter feed. Am I missing something?

– Broc Romanek