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SEC Seeks to Enhance Alternative Trading Systems Oversight

Last month, the Securities and Exchange Commission (“SEC”) proposed new rules to improve the transparency and regulatory oversight of alternative trading systems (ATSs) that trade stocks listed under a national securities exchange (NMS stocks). Per the agency’s proposal, an NMS stock ATS would be required to file in depth disclosures on the newly proposed Form ATS-N regarding its operations, as well as the actions of its broker-dealer operator and affiliates, and execution priority procedures. The proposal would also make Form ATS-N disclosures available on the SEC website, which could help market participants when deciding whether to conduct business with an ATS, and be better informed when evaluating their broker’s order handling decisions.

Public comments on the ATS proposal can be submitted to the SEC for 60 days following publication in the Federal Register. In the meantime, further details on the proposal are available in the SEC’s official press release.

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