SEC To Require Heightened Disclosures For Alternative Trading System

The SEC adopted amendments to Regulation ATS that will impose additional public disclosure requirements on alternative trading systems ("ATS") that trade stocks listed on national securities exchanges. The disclosures will be made through the new Form ATS-N.

An ATS that is trading stocks listed on a national securities exchange will be required to disclose certain operational information, as well as information regarding its broker-dealer operator and its affiliates. According to the SEC, the additional information is intended to provide clarity for subscribers on (i) "how their orders will interact, match, and execute" in the ATS, (ii) if and how subscribers are treated differently on the ATS than the broker-dealer operator and its affiliates, (iii) potential conflicts of interest, and (iv) the treatment of confidential trading information.