Alternative Trading Systems

Alternative Trading Systems

Alternative Trading Systems (ATS) are SEC-approved non-exchange trading venues. They play an important role in public markets for allowing alternative means of accessing liquidity.

Rule 300(a) of the SEC's Regulation ATS provides the following legal definition of an "alternative trading system":

Any organization, association, person, group of persons, or system:

* That constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange within the meaning of Rule 3b-16 of this chapter; and

* That does not:
# Set rules governing the conduct of subscribers other than the conduct of such subscribers' trading on such organization, association, person, group of persons, or system; or
# Discipline subscribers other than by exclusion from trading.

Examples of ATS

* Electronic Communication Networks
* Call markets - An auction market where orders are grouped until they reach a certain amount, and then executed together at a predetermined time.
* Matching systems
* Crossing network

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