The Role of Alternative Trading Systems

What this video covers

• Why an alternative trading system and an exchange both match orders, but differ in regulatory authority over participants
• How to apply both ATS definition prongs, including the ban on broader conduct rules and discipline beyond exclusion from trading
• The exchange-functions two-part test: multiple buyers and sellers, plus established non-discretionary methods that produce agreement on trade terms
• Why an order must be a firm indication, and why one buyer's orders facing one single dealer does not satisfy the multiple buyers and sellers test
• The solely routing exclusion and the two branches of the single-dealer exclusion, including incidental matching of undisplayed orders
• How an electronic communications network (ECN) disseminates and executes market maker orders, and which crossing and market maker systems are excluded
• Why a riskless principal system is treated differently, and why an ATS and an ECN are not mutually exclusive