Regulation of Exchanges and Alternative Trading Systems

The Securities and Exchange Commission today is adopting new rules and rule amendments to allow alternative trading systems to choose whether to register as national securities exchanges, or to register as broker-dealers and comply with additional requirements under Regulation ATS, depending on their activities and trading volume. The Commission is also adopting amendments to rules regarding registration as a national securities exchange, repealing Rule 17a-23, and amending the books and records rules by transferring the recordkeeping requirements from Rule 17a-23 to Rules 17a-3 and 17a-4 as they apply to broker-dealer internal trading systems. Finally, the Commission is excluding from the rule filing requirements for self- regulatory organizations certain pilot trading systems operated by national securities exchanges and national securities associations. These rules will more effectively integrate the growing number of alternative trading systems into the national market system, accommodate the registration of proprietary alternative trading systems as exchanges, and provide an opportunity for registered exchanges to better compete with alternative trading systems.