Alternative Trading System (ATS)

RECENT NEWS
Mondo Visione  Nov 8  Comment 
Liquidnet, the global institutional trading network, today published Shape Shifting: Accessing the Dark Post MiFID II research on how buy-side traders plan to trade in the dark once broker dark pools are no longer admissible. Today, 65% of...
Reuters  Nov 7  Comment 
European Union efforts to bring greater transparency to stock dealing risk having the opposite effect, forcing regulators to intervene once again after new rules come into force in January.
Channel News Asia  Nov 6  Comment 
Barclays Plc has failed to persuade a U.S. appeals court to unwind a class action lawsuit accusing the British bank of defrauding shareholders about its private "dark pool" trading platforms.
Reuters  Aug 14  Comment 
JPMorgan Chase & Co has begun trading on a new private stock trading venue, or "dark pool," that lets its clients use the bank's algorithms to buy or sell stocks at a benchmark price reached over a period of time.
Financial Times  May 12  Comment 
Shifting tech operations to Nasdaq aims to offset regulatory burdens
Reuters  May 11  Comment 
Goldman Sachs Group Inc will launch a new private stock-trading venue, known as a "dark pool," on Friday, that is run by exchange operator Nasdaq Inc , according to a note to clients obtained by Reuters.
Benzinga  May 9  Comment 
The man considered the father of modern financial analytics believes there is a fintech bubble. Seth Merrin, founder and CEO of Liquidnet Holdings, Inc., also warned that the deregulation fervor of President Donald Trump could replicate in...




 
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An alternative trading system (ATS) is a non-exchange trading venue approved by regulatory authorities like the Securities and Exchange Commission (SEC) and Financial Services Authority (FSA). In the broadest sense, an ATS is an alternative venue - usually an electronic system - where buyers and sellers can execute trades in existing financial instruments. Instruments may include shares, bonds and derivatives. An ATS provides an additional pool of liquidity to trade in existing instruments. No new securities can be listed on an ATS.

There are predominantly two types of ATS: a) matching systems; and b) crossing networks. An ATS can be started by a proprietary firm or even an exchange. For example, the London Stock Exchange has plans to introduce an ATS of its own called Baikal.

Alternative Trading Systems are examples of dark pools i.e. private markets where the trading of securities is not visible to the public eye. These systems are popular among large, institutional buyers, such as hedge funds, because it allows them to purchase or liquidate large portfolios without others becoming aware of this and front-running their trades. Trades executed in dark pools do not report data back to the market and therefore do not affect prices listed on exchanges.

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