Alternative trading systems (ATS) are SEC-regulated electronic venues that match buyers and sellers outside traditional stock exchanges.

Alternative trading systems (ATS) are SEC-regulated electronic venues that match buyers and sellers outside traditional stock exchanges. Common examples include electronic communication networks (ECNs) and dark pools, which enable institutional and professional investors to seek liquidity, tighter spreads, and potential price improvement while minimizing market impact. Unlike exchanges that publicly display orders in a central order book, an ATS can offer anonymity and flexible order types, from midpoint crossing to conditional orders. For brokers, asset managers, and sophisticated traders, these platforms can provide faster execution, smart order routing options, and access to fragmented liquidity across asset classes. However, using an ATS also requires careful attention to transparency, best execution obligations, and Reg ATS reporting. By understanding how alternative trading systems operate, who participates, and what data they publish, market participants can evaluate when these venues make sense within a compliant, execution-focused workflow. Many ATSs support equities, ETFs, fixed income, and even digital assets, each with unique protocols, hours, and fee structures designed to align with specific liquidity objectives.

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