Five money management firms have banded together to focus on making markets fairer for investors, taking aim at alternative trading systems and dark pools on issues such as transparency and best execution.
“Our members' mission is clear: How can we get a better look at how we trade?” said Tyler Gellasch, executive director of the Healthy Markets Association, Washington, a non-profit group of money managers. “We are here because our members want a strong voice on market structure. Some others want the status quo; that's not who we are.”
Rather than focus on lobbying the Securities and Exchange Commission and Congress for changes in market structure, the HMA focuses on making the private sector — money managers, pension funds and other institutional investors — aware of the importance of monitoring their trades and the venues on which they trade.
The group conducts research on trading but also has developed an ATS transparency index gleaned from questionnaires that money managers completed for the group. Based on that data as well as publicly available data, a composite transparency score is computed for each system.
“We want to improve the best practices of the industry, then get the policies and practices in place to do execution better,” Mr. Gellasch said. “Clearly there's a need for this.”
The group is seeking new members. More information is available on its website, www.healthymarkets.org.