The SEC has the power and obligation to suspend Dark Pools

Gary Gensler reported that 90-95% of retail orders aren't processed through the lit exchange.

The SEC has the power and obligation to suspend Dark Pools

What are dark pools?

A dark pool is an exchange where securities are traded without the public's knowledge.

These exchanges are also known as "dark pools of liquidity," which refers to their complete lack of transparency. A dark pool was established in part so that institutional investors could carry out block trading without affecting the markets with their large orders and obtaining adverse prices.

Some people view dark pools negatively, but they serve a purpose by allowing large transactions to take place without affecting the main market. They are however at risk of conflicts of interest by their owners and predatory trading practices by some high-frequency traders due to their lack of transparency.

Retail orders not being processed

On Bloomberg, Gary Gensler reported exclusively that 90-95% of retail orders aren't processed through the lit exchange.

Rather than the NYSE, these orders are rerouted to dark pools according to the SEC Commissioner.

Although apes have been labeled conspiracy theorists, their theories have been proven to be accurate time and time again.

Orders aren't processed on the lit exchange in part due to payment for order flow, according to SEC Chairman and Commissioner Gary Gensler.

Ken Griffin, of Citadel, praised PFOF, saying it's good for retail investors.

Since PFOF routes executable orders to those who pay the most, market makers may not execute them. The average retail trader has a limited understanding and less data than institutional traders.

Gary Gensler on Bloomberg

Sec rule to suspend dark pools

SEC Rule 304(a)(4): Suspension, Limitation, or Revocation to the Exchange

DATE PASSED: October 9th, 2018

  • According to this rule, the SEC has the authority to BAN, HALT, LIMIT, RESTRICT, or REVOKE access to any alternative trading system (ATS) and/or dark pool that connects to the Exchange entirely.
  • It is possible for the SEC to enact full enforcement of this rule ANYTIME for a period of up to 12 months for retail investors if it is deemed beneficial. Furthermore, the rule states that the procedures for implementing the rule already exist.

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References n.d. [online] Available at: <> [Accessed 16 February 2022].

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