2022-01975: Amendments Regarding the Definition of “Exchange” and Alternative Trading Systems (ATSs) That Trade U.S. Treasury and Agency Securities, National Market System (NMS) Stocks, and Other Securities

Summary

The Securities and Exchange Commission ("Commission") is proposing to amend Rule 3b-16 under Securities Exchange Act of 1934 ("Exchange Act"), which defines certain terms used in the statutory definition of "exchange" under Section 3(a)(1) of the Exchange Act to include systems that offer the use of non-firm trading interest and communication protocols to bring together buyers and sellers of securities. In addition, the Commission is re-proposing amendments to its regulations under the Exchange Act that were initially proposed in September 2020 for ATSs to take into consideration systems that may fall within the definition of exchange because of the proposed amendments and operate as an ATS. The Commission is re-proposing, with certain revisions, amendments to its regulations for ATSs that trade government securities as defined under Section 3(a)(42) of the Exchange Act ("government securities") or repurchase and reverse repurchase agreements on government securities ("Government Securities ATSs"). The Commission is also proposing to amend Form ATS-N for NMS Stock ATSs, which would require existing NMS Stock ATSs to amend their existing disclosures. In addition, the Commission is proposing to amend the fair access rule for ATSs. The Commission is also proposing to require electronic filing of and to modernize Form ATS-R and Form ATS, which would require existing Form ATS filers to amend their existing disclosures. Further, the Commission is re-proposing amendments to its regulations regarding systems compliance and integrity to apply to ATSs that meet certain volume thresholds in U.S. Treasury Securities or in a debt security issued or guaranteed by a U.S. executive agency, or government-sponsored enterprise ("Agency Securities").

The agency’s own summary, as published.

What this changes

Amends 4 parts of the Code of Federal Regulations — the standing rules this notice rewrites.

• 17 CFR 232 Regulation S-T—General Rules and Regulations for Electronic Filings
• 17 CFR 240 General Rules and Regulations, Securities Exchange Act of 1934
• 17 CFR 242 Regulations M, Sho, ATS, AC, NMS, SE, and SBSR, and Customer Margin Requirements for Security Futures
• 17 CFR 249 Forms, Securities Exchange Act of 1934