The SEC issued its much-anticipated Concept Release on proposed dark pool regulation late on Friday, November 13.  While the broad amendments outlined in the release remain unchanged from the public statements at the SEC’s October 21st meeting, the 116-page document contains some new details, summarized below.  The SEC is holding a 90-day comment period, seeking public input on the proposals.

The SEC is proposing three major changes:

1. Amend the definition of “bid” or “offer” under Regulation NMS to apply to actionable indications of interest (“IOI”).  This proposal would affect all persons that are subject to quoting obligations, including exchanges, ATSs and OTC market makers.

2. Lower the threshold under Regulation ATS at which an ATS is required to display its best-priced orders for a NMS stock and provide access to such orders from 5% to 0.25% of average daily volume for such stock.  There is an exemption to this rule for block trades with a market value of at least $200,000.

3. Require real-time disclosure in the public data stream of the identity of each ATS that executes a trade, unless the trade is a block trade with a market value of at least $200,000.

Click here to read a more detailed summary (2 pages)>

Click here to read the full proposal (116 pages)>