Financial Markets, Regulations And Ethics

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“Exam Number”: N14025 “Word Count”: 1500 “MSc in Finance & Management 2014/15” “Financial Markets, Regulations & Ethics” (FMRE) “Equity Trading in Dark Pools” (Financial Markets) “This assessment/report is all my own work and conforms to the University’s regulations on plagiarism”  FINANCIAL MARKET REPORT Subject : “Equity Trading in Dark Pools” Adressee : Financial Conduct Authority ABSTRACT This report briefly examines the “Equity Trading in Dark Pools”. The purpose of this report is to provide the Financial Conduct Authority with the information necessary for assessing importance of ruling the dark pools in the UK. This report provides definition and history of dark pools, advantages and disadvantages of dark pools for the main participant groups, regulators’ concerns, dark trading regulations and controversies. Recommendation addressed to the Financial Conduct Authority that it should take no action for this time being while awaiting for EU market response to the MiFID II implementation in EU. DARK POOLS In general, dark pools (also called black pools) are alternative equity trading forums that privately display orders and typically used by large institutional investors and operate outside of traditional “lit” pools or exchanges (Zhu (2014), Picardo (2014), Kwan et al. (2014)). Different from “lit” pools, the identity and amount of individual trades are concealed. The pools typically privately display quotes or provide prices at
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