Dark Pools: Where's the Transparency?
CBOE Views on Dark Pools:
- Lack of regulation and transparency could hurt investors; poses unquantifiable market risk.
- Dark pools operate on an uneven playing field with regulated exchanges. Specifically, they do not have to shoulder the expense and responsibility of regulation and are allowed to free ride on the backs of regulated exchanges.
- To the extent that dark pools continue to operate without comprehensive regulation, we will see more liquidity siphoned away from regulated exchange markets.
- CBOE favors more standardization between exchange-traded markets and markets that are less regulated.