The news that SEC chairwoman Linda Shapiro has asked staff to come up with a method to "eliminate the inequity that results from flash orders" focuses a much broader spotlight on the role of dark pools. One could argue that this is a key moment to address the fragmentation of the markets that some have fretted about. 

It would be nice if prices of stocks reflected the market interplay of all bids and asks. And one could argue that the rise of dark pools and practices such as flash orders have undermined that, to some degree. The danger for the industry is that reformers turn this into a populist issue. The trick will be coming up with a solution that preserves the features that institutions like while addressing the gaming that some have found troubling--issues such as IOIs.   

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