CIT Group CEO John Thain, the former head of the New York Stock Exchange, said there’s too much fragmentation and insufficient transparency in the stock market.
“Dark pools,” which allow for trading of stocks outside of exchanges, should be eliminated, Thain said in an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg Television’s “Market Makers.” “The biggest problem is the fragmentation, you can trade stocks in 50 different places.”
Thain’s view echoes that of his successor, NYSE Euronext CEO Duncan Niederauer, who has decried the expansion of off-exchange equity trading. More than a third of all stock volume is now executed off exchanges, according to data compiled by Bloomberg.
Thain said Tuesday that the markets owned by NYSE Euronext and Nasdaq OMX Group, which own the listing venues for almost all U.S. stocks, should get to control when companies trade. Reg NMS, developed when Thain ran the NYSE, mandates shares must trade on whatever venue has the best price at any given time, which has helped markets proliferate.
“There’s no transparency in most of those places,” Thain said Tuesday. “That’s not good for the market. That’s not good for retail investors.”
