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Alternative Market Briefing

Asian regulators should carefully weigh rules for alternative trading platforms like ‘dark pools’ - HK-SFC CEO Wheatley

Friday, November 20, 2009

From Christine Gaylican, Opalesque Asia:

While carefully treading a post-crisis market, Hong Kong’s Securities and Futures Commission (HK-SFC) CEO Martin Wheatley urged fellow regulators to carefully assess the gains and upkeep of “dark pools” currently proliferating in the Asia-Pacific markets.

Speaking today at the Trade Tech Asia 2009 Conference in Singapore (here), Wheatley noted that though “dark pools” as an alternative trading venue provides benefits to the market such as reducing trading costs, enhancing overall market liquidity, providing innovative trading tools and allowing faster execution, Asian regulators must consider the potential challenges they face especially during this critical post crisis adjustment period.

“The proliferation of dark pools has not only raised concerns over transparency and fairness of alternative institutional trading venues to other market participants, but also potential difficulties for regulators to conduct effective market surveillance,” said Wheatley, noting dark pools are still in their early stages in Asia.

He explained that when it comes to regulating alternative trading venues, it was crucial to strike a proper balance between realising the potential benefits offered and reducing their potential risks.

He said three points should be emphasised by Asian regulators in analysing these alternative tradin......................

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