[1] The equivalent term under European legislation is a multilateral trading facility (MTF).
These venues play an important role in public markets for allowing alternative means of accessing liquidity.
[4] Rule 300(a) of the SEC's Regulation ATS provides the following legal definition of an "alternative trading system": Any organization, association, person, group of persons, or system: Regulation ATS was introduced by the SEC in 1998 and is designed to protect investors and resolve any concerns arising from this type of trading system.
Regulation ATS requires stricter record keeping and demands more intensive reporting on issues such as transparency once the system reaches more than 5% of the trading volume for any given security.
Specifically, it requires that an alternative trading system comply with the reporting and record keeping requirements Rule 301 (b)(5)(ii) of Reg ATS, if during at least 4 of the preceding 6 calendar months, such alternative trading system had: