Automated Execution Systems

What this video covers

• How the NYSE and other traditional exchanges electronically match and execute standard orders without floor broker intervention, and why the electronic audit trail matters to regulators
• What an alternative trading system (ATS) is and the critical registration distinction: ATSs register as broker-dealers and file Form ATS with the Securities and Exchange Commission (SEC), not as national securities exchanges
• Why an ATS lacks Self-Regulatory Organization (SRO) status despite matching orders like an exchange, and how it is regulated by the SEC and Financial Industry Regulatory Authority (FINRA) instead
• The scope of FINRA's ATS order-and-execution recording-and-transmission requirement as applying specifically to ATSs that accept security-futures orders, not as a blanket rule for all equity ATSs
• How electronic communication networks (ECNs) differ from dark pools: ECNs display orders for direct subscriber trading, while dark pools hide pre-trade orders to protect large institutional blocks from market impact
• Why dark pools must still report executed equity trades after the fact to the Trade Reporting Facility (TRF), and that anonymity is strictly pre-trade not post-trade
• The four-way comparison of exchanges versus ATSs across registration, pre-trade transparency, SRO status, and ability to list securities