Automated Execution Systems

What this video covers

• Why the vast majority of orders today, even on the New York Stock Exchange (NYSE), are executed electronically without any floor broker intervention
• What an alternative trading system (ATS) is: an electronic venue that matches orders outside traditional exchanges
• The critical registration distinction: ATSs register as broker-dealers and file Form ATS with the Securities and Exchange Commission (SEC), not as national securities exchanges
• Why ATSs lack Self-Regulatory Organization (SRO) status and what that means for rulemaking and member policing compared to exchanges
• How electronic communication networks (ECNs) differ from dark pools: ECNs display orders publicly, dark pools hide orders pre-execution
• Why institutions use dark pools to minimize market impact on large block trades, and why the pool is only dark before execution
• The post-trade reporting requirement: dark pools must report executed trades to the Trade Reporting Facility (TRF), so trades are not secret forever