SIFMA Paper on Displayed and Non-Displayed Liquidity

Concerns have been raised by regulators, members of Congress, and the press regarding dark pools, flash quotes, and high frequency trading.

It is clear from recent public commentary that these and related terms are often misunderstood, or used variably to cover a large variety of trading centers, trading interests, and trading mechanisms or strategies.

SIFMA member firms, which serve both institutional and retail investors, believe that it is in their clients’ and our markets’ interests to study these trading concepts and to work with market participants, regulators and Congress to ensure that our markets remain fair, honest and efficient for all investors. To facilitate an informed review of the issues at hand, SIFMA prepared this paper to clarify the definition of many terms and reduce the confusion surrounding them.