WASHINGTON (Reuters) — Ten American exchanges have agreed to give two market watchdogs more power to ferret out insider trading regardless of where it occurs in the United States, regulators said Wednesday.
Under the proposal, the exchanges will give NYSE Regulation, which oversees the New York Stock Exchange, and the Financial Industry Regulatory Authority, which is known as Finra and is responsible for Nasdaq, the responsibility for detecting illegal trading.
The move aims to improve the surveillance, investigation and enforcement of fraudulent trading in equities securities...cont'd
http://www.nytimes.com/2008/08/14/washington/14exchange.html?_r=1&adxnnl=1&referer=sphere_related_content&oref=slogin&partner=rssnyt&emc=rss&adxnnlx=1219399703-iJf4vw7Cz+ubHo52+JpC--------
Competition Tightens for Asian Exchange Operators
HONG KONG -- Stock-exchange operators in Asia, already hurt by slack trading volumes, could face tougher competition from a growing rival: alternative trading platforms.
The platforms, known as dark pools or light pools depending on how they work, are capturing a growing chunk of trade undertaken by pension and hedge funds. A growing number have been setting up shop in Asia, appealing to funds that seek lower costs and the ability to trade in huge amounts without immediately affecting prices.
"A lot of trading platforms have already tapped the U.S. and are growing in Europe, so Asia is the logical..cont'd
(Subscription to WSJ required)
http://online.wsj.com/article/SB121934802512761171.html?mod=todays_asia_nonsub_corporate_news---------
Fragmenting Europe Getting Two New Trading Platforms
June 30, 2008
John Hintze
Two new alternative trading platforms have announced plans to launch in Europe during the first half of 2009, escalating the growing competition prompted by recent regulatory changes. Both venues say they will bring new approaches to the continent’s developing liquidity fragmentation problem.
The London Stock Exchange (LSE) and Lehman Brothers said last week that they have formed Baikal--a reference to the Russian lake that is the deepest fresh-water body in the world--which will roll out in the first quarter of next year. Two days earlier, a ten-member consortium of Nordic banks and brokerages, including three of Sweden’s top banks, announced their intention to begin operating a platform--Burgundy--by mid-2009.
Baikal will be a dark liquidity pool, executing orders anonymously and allowing investors to hide their trading strategies. An LSE spokesperson said his exchange will develop the matching engine while Lehman applies its expertise in “anti-gaming logic” to prevent participants from identifying large block orders and trading against them, which often increases an institution’s cost of execution.
“Baikal provides an exciting opportunity for the market to transact certain types of business in European equities with the confidence of total pre-trade anonymity,” said LSE chief executive Clara Furse in a statement, “alongside the efficient price formation of the electronic order books of exchanges, where the majority of equities across Europe are traded.”
Several multilateral trading facilities (MTFs) have begun operating in the last few years, in anticipation of the November effective date of the European Union’s Markets in Financial Instruments Directive (MiFID), which harmonizes regulations across member states and imposes best-execution requirements on brokerages. “What they missed is that MiFID would result in a totally fragmented marketplace,” said Tim Recroft, director of research at London-based consultancy Thomas Murray. “We’ve lost price discovery, which is one of the fundamental virtues of a traditional exchange.”
U.S. alternative trading systems (ATS) operators such as Instinet, Nyfix, Liquidnet and Investment Technology Group have established platforms in Europe, and preparations for a slew of other MTFs are under way. One, the consortium-owned Turquoise, plans to begin offering both displayed quotes and dark liquidity in September. Nasdaq OMX Group’s Pan European Market, also anticipated to roll out that month, will be a displayed ..
..snip..
That strategy came into vogue in the U.S. last year, and other European venues such as Instinet’s Chi-X are taking similar approaches. However, Burgundy, whose owners account for about 45 percent of volume on the Swedish stock exchange, will confine its activity to Nordic-country stocks. The Stockholm-based venue, backed by Avanza Bank, Carnegie, Evli Bank, Svenska Handelsbanken, Kaupthing Bank, Neonet, Nordnet, Skandinaviska Enskilda Banken, Swedbank and Ohman, will “ensure high liquidity, low transactional costs, short response times and best execution,” said the consortium in a prepared statement....cont'd
http://www.securitiesindustry.com/news/22575-1.html--------
Regulation of alternative trading systems: Evolving regulatory models and prospects for increased regulatory coordination and convergence.
In recent years, the emergence and growth of electronic trading platforms for securities and other financial instruments has spurred significant debate among financial market regulators. Rapid advances in technology have permitted innovative participants in the financial markets to offer traditional services in new and more efficient ways, including by permitting electronic order-matching and trade execution outside the confines of the physical trading floor of a stock exchange. These new trading platforms, commonly referred to as alternative trading systems (or ATSs), provide a wide variety and combination of services, including dissemination of bid and offer quotations, order routing, trade execution, and clearance and settlement services.1 The electronic nature of alternative trading systems permits easy cross-border operation and access, particularly given advances in communications technology. Through online connections, proprietary software or terminals, subscribers may access and execute orders through ATSs, both domestically and in multiple foreign jurisdictions.
Securities regulators have generally recognized that alternative trading systems can bring substantial benefits to markets and investors. The advanced technology utilized by alternative trading systems can serve to reduce transaction costs, both directly for system participants (by increasing the speed and ease of execution or by creating new liquidity pools for certain securities) and indirectly for the wider market (by exerting competitive pressures on existing exchanges and brokers).2 By providing additional liquidity pools and enhanced order routing and execution opportunities, alternative trading systems also may reduce the cost and increase the likelihood of achieving best execution. In addition, ATSs also often provide trading and execution mechanisms not available from traditional exchanges, such as anonymous or afterhours trading.3 Accordingly, they expand investors' options in choosing a trading forum that best suits their needs for particular transactions.
While acknowledging the benefits that ATSs confer on the financial markets, securities regulators have also identified potential issues that the growth of these systems may raise under the existing framework for market regulation. In particular, regulators have focused on the extent to which alternative trading systems, by using technology and new business models to deliver services in an innovative manner, may blur the line between exchanges and more traditional market intermediaries like brokers and dealers.4 By offering new combinations of services that do not fit neatly into existing definitional categories, ATSs pose a potential challenge to regulatory schemes that assume a clear delineation between exchanges and other market intermediaries, such as broker-dealers. In addition, these systems further erode the boundaries between domestic and foreign capital markets by providing crossborder access, which has heightened the interest of regulators in addressing the potential new issues that these systems may present...cont'd
http://findarticles.com/p/articles/mi_qa3791/is_200204/ai_n9060427 
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