FINRA Provides Free ‘Dark Pool’ Data to Investors

The Financial Industry Regulatory Authority announced Monday that it has begun providing data indicating the activity levels in each alternative trading system (ATS), including all market facilities commonly called “dark pools.”

Under FINRA’s new transparency initiative, the public will now be able to see the total shares traded each week by security in each ATS or “dark pool.”

Each ATS is required to report to FINRA its weekly aggregate volume information on a security-by-security basis. The information from ATS reports that FINRA made available Monday were filed for the week of May 12 through May 18.

This data, FINRA said, will be provided to the nonprofessional investing public free of charge and is available through FINRA’s website.

ATSs account for a significant percentage of total over-the-counter trading in exchange-listed equities in the United States. Currently more than 30% of the total National Market System volume of shares traded occurs over the counter, FINRA said.

“FINRA hopes that providing a clear view of the level of activity handled by these ATSs or ‘dark pools’ will increase market transparency and thereby enhance investor confidence,” said Steven Joachim, FINRA executive vice president, Transparency Services, in a statement. “FINRA’s commitment to transparency is bringing light to what was previously a dark area of the equity markets. Making this information available to both the investing public and market participants provides an unprecedented view into the activity of these highly significant trading venues.”

The information, FINRA said, will shed light on the securities that are traded in each dark pool, which occurs away from traditional stock exchanges. While the trades in these facilities are made available on a real-time basis to investors and professionals today through securities information processors (SIPs), these trades are not attributed to a specific ATS or dark pool, FINRA explains.

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Prior to FINRA making this data generally available, ATS volume has been provided primarily to professionals, based on voluntary reporting by some (but not all) ATSs on an aggregate, monthly basis, FINRA says.

“FINRA’s collection of the data under its rule is designed to ensure that the data reported is complete and accurate, and by making the data available on a weekly, symbol-by-symbol basis, provides a new level of transparency that may be reviewed and studied by non-professional and professional traders, academics and regulators,” the self-regulator said in the statement.

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