Adam Sussman, partner and director of research at the organisation, called for dark pool operators to make Form ATS public as a simple way of providing the industry with more information on their activity.
His comments came after the Security and Exchange Commissionâs (SEC) fined US firm Pipeline $1 million for failing to disclose that an affiliate was processing its trading orders.
The firm agreed to pay the settlement without admitting or denying the results of the SECâs investigation.
Mr Sussman said that the action is likely to mean that head traders at buy-side firms will be questioned by directorial boards before the end of the year.
âThey will be asked what was their due diligence on Pipeline, how did that fall short? How was it they were led astray? Ultimately directors want to guarantee that this illegal behaviour isnât happening elsewhere.â
However, he added: âItâs not a case that regulations for dark pool operators were too light - but there certainly needs to be more transparency surrounding them.â
European dark pool operators are expected to come under greater scrutiny in the proposed revisions to the Markets in Financial Instruments Directive (MiFID) by the European Commission.
Trading across Organised Trading Facilities (OTFs) will become more visible as part of the regulatory update.
By Jim Ottewill