Regulated Exchanges Want Trade Transparency, Too

As quoted in this New York Times article from June 26, 2012, “NYSE Euronext, the company that owns the exchange, is asking regulators to approve a new platform that would attract orders from ordinary investors and then divert them away from the normal exchange with the aim of getting the investor a better price.” In an attempt to level the playing field and provide transparency to “dark markets,” the NYSE and Nasdaq have been looking to join in on this “dark market” rather than dismantle it. As the CFA Institute has noted, a plea to regulators is an attempt to put public markets and private markets on an even trading ground. Likewise, public markets are not looking to regulate private trading practices in order to correct what is unfair, but to increase competition. Thus, what has been called the process of “internalization,” and redirecting retail shares from the NYSE or Nasdaq into the hands of private firms, could affect the way retail investors’ shares are traded and purchased.