Former SEC Commissioner (2002-2008) Paul Atkins believes crossing networks known as dark pools, are really valuable marketplace tools for price discovery and liquidity. “Folks who have large orders, who have size in the market, their orders actually move prices…that’s why they seek other venues to trade, and so ultimately, ironically, things like dark pools help to enhance liquidity and enhance the price discovery mechanism in the market place, because ultimately all these prices are reported. ” explained Atkins.
When asked whether the SEC would be an effective regulator of hedge funds, Atkins expressed doubts.
“I think what they really need to concentrate on are advisers that affect retail investors, and that’s mutual funds,” said Atkins. “That’s really where the SEC’s strength is, and hedge funds and other things that really cater to sophisticated investors is a completely different animal.”
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