Alternative Trading System is a current federal securities-regulation defined term. This guide preserves the rule-specific definition and boundaries instead of replacing it with informal market shorthand.
ReviewedEvidence2 sourcesSectionPhrases & Idioms
Quick answer
Under the incorporated Regulation ATS definition, an alternative trading system performs exchange-like securities-market functions but does not regulate subscribers generally or discipline them beyond exclusion from trading.
Key details
Canonical FormAlternative Trading System
Core MeaningRegulation NMS incorporates the definition in 17 CFR § 242.300(a): an alternative trading system brings together securities purchasers and sellers or performs exchange-like market functions, while not setting general subscriber-conduct rules or disciplining subscribers except by exclusion from trading.
Further guidance
History Boundary
This page reflects the current reviewed federal regulation text and should be rechecked if the incorporated Regulation NMS or Regulation ATS definition changes.
Meaning
Regulation NMS incorporates the definition in 17 CFR § 242.300(a): an alternative trading system brings together securities purchasers and sellers or performs exchange-like market functions, while not setting general subscriber-conduct rules or disciplining subscribers except by exclusion from trading.
Usage Boundary
This is the federal regulatory term incorporated by Regulation NMS; it is narrower than using “alternative trading system” informally for any nontraditional trading technology.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
17 CFR § 242.300 — Definitions↗ (opens in a new tab)Legal Information Institute, Cornell Law School · Current e-CFR mirror of Regulation ATS definitions, including the operative definition of alternative trading system incorporated by Regulation NMS.
Under current U.S. Regulation NMS, an “automated trading center” is a trading center with systems, procedures, and rules capable of displaying automated quotations, identifying non-automated quotations as manual, and applying reasonable standards for changes between automated and manual status. This is a condensed rule-scoped explanation of 17 CFR § 242.600; the full definition contains multiple operational conditions and should be consulted for compliance work.
A national market system plan approved by the Securities and Exchange Commission, temporarily or permanently, pursuant to § 242.608. Keep the approval and § 242.608 scope in the definition; this is not a generic label for any market-system operating plan.
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A defined Regulation NMS facility operated by or for an exchange or national securities association that executes orders or presents them to members for execution. This page is limited to the Regulation NMS definition; other regulatory or operational uses of “trading facility” may be broader.
Regulation NMS defines trading center broadly to include specified exchanges, association facilities, alternative trading systems, market makers, and other broker-dealers that execute orders internally as principal or crossing agent. This page uses the U.S. Regulation NMS definition; ordinary-language uses of trading center can be broader and should not be substituted for the regulatory term.
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