The additional information available for public view will spur some traders to be more selective in choosing which ATS to use, said Tyler Gellasch, executive director, Healthy Markets Association, Washington, a non-profit group of money managers focusing on issues such as transparency and best execution at ATS and dark pools.
“Enhanced disclosures will indirectly mean some venues that are relatively fungible will likely see lower trading volume activity,” Mr. Gellasch said, and thus “indirectly, the brokers and investors vote with their feet.”
“Why would a broker risk routing orders to a venue with a significant conflict of interest when it can route to another without the conflict and receive similar quality?” Mr. Gellasch asked.
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