Automated Execution Systems and Alternative Trading Systems

What this video covers

• Why electronic communications networks (ECNs) are lit venues with pre-trade transparency while dark pools are non-displayed venues with post-trade transparency only
• How dark pools, crossing networks, and ECNs are all separate types of alternative trading systems (ATS), not sub-types of one another
• What Regulation ATS requires: ATS operators must register as broker-dealers, not exchanges, and the 5% average daily volume threshold that triggers fair access for equity ATSs
• Why the 20% average daily volume threshold applies only to qualifying municipal securities and corporate debt ATSs for capacity, integrity, and security rules, not equities
• How the nondisplayed carve-out to fair access works, and why showing orders to subscribers disqualifies an ATS even if the public never sees them
• What the Financial Industry Regulatory Authority (FINRA) ATS record-and-transmit rule actually covers: security-futures orders only, not all ATS activity
• How Regulation NMS prevents trade-throughs by enforcing the National Best Bid and Offer (NBBO), and why the NYSE Pillar rules replaced all legacy automatic execution terminology