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What is an Alternative Trading System (ATS)?

An ATS is a platform separate from an exchange where securities are traded. ATSs provide marketplaces for buyers and sellers to transact in securities, much like a stock exchange.

However, they are not available to the entire investment public, and they do not necessarily provide public information on the best prices available to traders within their system. They also do not set rules governing the conduct of subscribers and they perform no self-regulation, while exchanges perform all of these functions.

Additionally, because ATSs are regulated as broker-dealers, they comply with a different set of regulations than traditional exchanges. Trading on ATSs regularly comprises 10-15% of U.S. equity trading volume.

What is an Electronic Communication Network (ECN)?
What are “Dark Pools” of Money?

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