SEC Issues Proposed Rule Related to Alternative Trading Systems

The SEC has issued a proposed rule, Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange”; Regulation ATS for ATSs That Trade U.S. Government Securities, NMS Stocks, and Other Securities; Regulation SCI for ATSs That Trade U.S. Treasury Securities and Agency Securities Requirements for Large Private Equity Advisers and Large Liquidity Fund Advisers.

The proposed amendments would (1) “[e]xpand Regulation ATS for alternative trading systems (ATS) that trade government securities, NMS stock, and other securities”; (2) “[e]xtend Regulation SCI to ATSs that trade government securities”; and (3) update the definition of an “exchange” in Rule 3b-16 of the Exchange Act to “address a regulatory gap.”

Comments on the proposed rule are due 30 days after the date of its publication in the Federal Register. For more information, see the press release and fact sheet, as well as statements by SEC Chair Gary Gensler and Commissioners Caroline A. Crenshaw and Hester M. Peirce, on the SEC’s Web site.