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FBN's Charlie Gasparino on NYSE CEO Duncan Niederauer and NASDAQ CEO Robert Greifeld teaming up to make a joint regulatory response to dark pools.
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New York Stock Exchange CEO Duncan Niederauer sat down with her and Charlie Gasparino we -- Charlie isn't afraid to ask those tough questions.
Here's the Niederauer had to say about the rivalry between him and NASDAQ CEO Bob -- -- Like the Tino and help far right thank you ladies -- they've -- -- they don't hate each other commodity.
They they fight every day over the same -- it's their fight to win the hearts and minds -- -- have Kentucky basketball fans.
And you we're gonna -- really hard on the field at the same time I think we've got some common interest you look at what's going on the market right now.
The two of us do run the largest exchanges in the US.
We -- capacity problem in the markets forget the fragmentation.
I think the bigger issue that we're only starting to talk more about is almost 40% of the market isn't getting to his exchange or -- So I think the two of us have a lot more in common wish you were gonna.
Right so how much more in common kidneys -- have are these rivals some safe bitter enemies.
Teaming up for the greater good of the market -- Charlie -- -- or bear markets we should point out that a year ago if I guess this week -- around this time a year ago.
-- Fox Business that was first report that the NASDAQ was launching a hostile takeover on the New York Stock Exchange of these guys really.
Our bid arrived dissension on the Ford -- -- FaceBook IPO that was a big thing and went to the NASDAQ.
Here's what we know now here's what they're not fighting over -- this is fascinating and what people say they don't like each of them he said it was -- its -- and arrival whatever.
They have recently met to combat what's known in the marketplace as dark pools now these are these are sort of areas where it private exchanges where order flow trading Obama the trading where buyers -- -- are matched instead of on exchange.
The match sense of trading this somewhere.
Why -- they combating that -- to reasonable when that's it's killing their businesses right you know they make money when the order flow comes to their change.
Particularly on their listed stock I mean -- held -- -- the once.
Shares of FaceBook to trade.
On the NASDAQ not and to some that in some guys some guys trading -- somewhere.
And number -- it hurts pricing right how do you know what the clitoris prices distort pricing info if it's done over year and hurts investor confidence and small doses don't know.
For example if the price of FaceBook is really what it is so what are they -- -- here's what we understand we're getting some more information will be reporting this throughout the day.
They have met secretly privately whatever you call right -- -- Niederauer put down their davis' recently met.
To discuss a joint lobbying effort to combat the -- notion of dark pools by the -- 40% of all volume now trades in these dark pools.
You will be of it is it's a lot already 48 away from the exchanges in these dark pools -- -- lots more percentage.
They're what they're doing is -- teaming up to to do a joint regulatory response.
The SEC.
Has paid somewhat attention to this point away a lot of this has to do with the trading of that high frequency trading a lot of that is done in these dark pools.
Again distorting the prices so they have met to sort of deal with these issues.
If you notice what he said in that clip and this is what got me thinking what -- really -- -- that.
I made my call today to both analyst of people at all the changes they confirmed that they have met.
They're and they're developing a joint lobbying response and from what I understand -- -- have met with the SEC.
We're gonna meet with the SEC together on this issue to address the dark -- story I will say this that it sounds like inside baseball what if -- small investing you should care about the -- stock.
You want the price of IBM to be with you see it in the Paper.
You don't want it really to be distorted by two guys -- -- -- cheap cheaper over in this other exchange and that's why this is a big issue.
The problem is that when it's trading these this these these other exchanges.
The prices distorted you really don't know what the price of -- in this that's -- and they have -- altruistic interest in this.
And obviously a personal interest if you drive that order flow back to the exchanges.
-- to make more money.
We should ask why did the -- the -- allow these dark pools to -- was initially thought that the price competition would be good.
Different sort of different trading venues you could squeeze industries exchanges on pricing.
There's a downside to a no capacity as -- -- I think no no transparency yes thank you sir okay.
