Updated on May 9, 2022.
The proposal would require certain systems and platforms currently not subject to any registration requirements to register as broker-dealers and ATSs.
By Stephen P. Wink, Marlon Q. Paz, Naim Culhaci, and Deric Behar
On January 26, 2022, the Securities and Exchange Commission (SEC) issued a set of proposed amendments (Proposal) regarding the regulation of alternative trading systems (ATSs) that would, among other things, substantially expand the definition of an “exchange” as interpreted by Rule 3b-16 under the Securities Exchange Act of 1934 (the Exchange Act) to capture “Communication Protocol Systems.” Specifically, Rule 3b-16’s interpretation of the “exchange” definition would be broadened in several meaningful aspects, including by removing the current requirement that a platform needs to bring together “firm orders” to be deemed an “exchange.” Continue Reading