One of the biggest critiques of our current market structure is that retail investors are being given short shrift by some of the most profound institutional developments, such as the rise of dark pools and the rise of hig- frequency trading.

Some have argued that this has led to volatility and fragmentation such that individual investors no longer feel welcome. Some have used this phenomenon to explain the recent outflows of retail money from stocks. But the issue was always a bit overblown in part because retail investors still tend to invest via mutual funds, who can and do enjoy the benefits of dark pools. Increasingly, they may also be able to enjoy some of the liquidity benefits from high-frequency traders.

Citi's Citi Cross service, for example, aims to broadly link retail order flow with high-frequency trading flow. According to the Financial Times, "Retail trades at Citi currently pass through Citi Match, the broker's existing dark pool. If there is no buyer to match a trade, it goes to the open market through Citi's market-making business. Under the new system, Citi will pass orders that are unfilled by its market-making business through Citi Cross before going to the market." At that point, the orders will intersect with high-frequency orders.

It's unclear whether this will result in a good deal for retail trades, but the concept is catching on. Knight Securities also has plans for such a service. The hope is that more individual market orders will somehow benefit from price improvement and limit orders will perhaps get filled faster.

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