Alternative trading system

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The Financial Industry Regulatory Authority (FINRA) previously announced an expansion to its ongoing transparency initiative for the over-the-counter (OTC) equity market. This expansion entails FINRA publishing new data about OTC trading volume occurring outside of alternative trading systems (ATSs).

As of December 2, FINRA began publishing the following types of data: 1) monthly aggregate block-size trading data for OTC trades in National Market System (NMS) stocks executed outside an ATS, on a one-month delayed basis; and 2) aggregate non-ATS volume for each member firm (by eliminating the de minimis exception for member firms executing fewer than, on average, 200 non-ATS transactions per day during an applicable reporting period).
Continue Reading FINRA Expands Transparency Initiative Related to OTC Equity Trading Volume

The Financial Industry Regulatory Authority’s Office of the Chief Economist has released a working paper (Study), maintaining that institutional orders routed by brokers that send a high percentage of such orders through affiliated alternative trading systems (ATSs) tend to receive lower order fill rates and higher execution costs. The Study examined order-handling information over the life of 330 million orders, routed by 43 active institutional brokers for a sample of 273 stocks during October 2016.
Continue Reading FINRA Working Paper Concludes High Broker-Affiliated ATS Order Routing is Associated with Lower Fill Rates, Higher Transaction Costs

On August 13, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 18-25 to remind Alternative Trading Systems (ATS) to evaluate their supervisory systems to ensure compliance with their supervision obligations, including, without limitation, with respect to business continuity, recordkeeping, Regulation ATS, Regulation NMS, Regulation SHO and the SEC’s Market Access Rule, to the extent…

On July 18, the Securities and Exchange Commission adopted new Form ATS-N and amendments to Regulation ATS and Exchange Act Rule 3a1-1. The new requirements are designed to enhance transparency of alternative trading systems (ATSs) that trade stocks listed on a national securities exchange (NMS Stock ATSs) by requiring them to publicly disclose detailed information about their operations, including order types and market data used on the ATS, fees, the ATS’s execution and priority procedures, and any procedures to segment orders on the ATS.
Continue Reading SEC Adopts New Form ATS-N and Amendments to Regulation ATS and Exchange Act Rule 3a1-1 to Enhance Transparency and Oversight of Alternative Trading Systems