NYSE Euronext and Nasdaq OMX Group Inc. (NASDAQ:NDAQ), the biggest owners of American stock exchanges, are urging US legislators to support changes to rules that caused a proliferation of broker-run markets that draw orders away from public venues.

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Dark Pools and brokers should be required to provide better prices than those available on exchanges or offer quotes publicly at the best levels, the companies said in a written presentation to staff of the House Committee on Financial Services.

Lawmakers are holding hearings on the structure of US markets in Washington on 20 June.

Dark pools, unlike exchanges, are private venues that execute orders without displaying bids and offers in advance.

The Securities and Exchange Commission should explain why Regulation ATS, approved in Y 1998 to integrate alternative venues that compete with exchanges listing stocks into the broader marketplace “remains sound policy,” NYSE Euronext (NYX) and Nasdaq OMX said.

That rule and another set of changes the SEC approved in Y 2005 overhauled trading and led to the creation of more than four dozen venues that compete with the New York Stock Exchange and NAS. Executives at both companies have pushed for changes to how dark pools operate over the last 3 yrs.

The NYSE and NAS have seen their share of trading in the securities they list drop to less than 27% as venues providing cheaper costs and more flexibility about how orders are executed gained traction.

Dark pools and brokers use prices established by exchanges when they match buy and sell requests.

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Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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