Alternative Trading Systems

Alternative trading system (ATS) is a US and Canadian regulatory term for a non-exchange trading venue that matches buyers and sellers to find counterparties for transactions. Alternative trading systems are typically regulated as broker-dealers rather than as exchanges. In general, for regulatory purposes, an alternative trading system is an organization or system that provides or maintains a market place or facilities for bringing together purchasers and sellers of securities, but does not set rules for subscribers. An ATS must be approved by the United States Securities and Exchange Commission (SEC) and is an alternative to a traditional stock exchange. The equivalent term under European legislation is a multilateral trading facility (MTF).