Americas: Are SROs’ days numbered?

Author: | Published: 9 Dec 2014

Discussion about how to tackle market structure and the opaque activities of dark pools has left one group feeling a little left out: the regulated.

Operators of alternative trading systems (ATS), including dark pools, are often registered broker dealers. As such they fall under the regulatory auspices of not only government regulators such as the Securities and Exchange Commission (SEC), but also the Financial Industry Regulatory Authority (Finra) – the industry's self-regulating organisation (SRO).

Exchanges occupy a special regulatory space, being SROs and able to contribute to the rulemaking process.

As off-exchange trading and ATS become more popular, discrepancies in the treatment of broker-dealers and...