SEC Proposes Significant New Regulatory Obligations for Communications Protocol Systems and Government Securities ATS – Corporate/Commercial Law

United States: SEC proposes significant new regulatory requirements for communications protocol systems and government securities ATS

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The Securities and Exchange Commission (SEC) has proposed significant changes to the regulation of securities trading systems that use non-firm trading interests and alternative trading systems (ATS) that trade public securities.1 Specifically, the SEC proposal would require:

  • systems that offer the use of non-firm trading interests and protocols to bring buyers and sellers of securities together (communications protocol systems) to (1) register as an exchange, or (2) operate by a broker registered in accordance with ATS Regulations (ATS Reg); and

  • ATSs that only trade in government securities or government securities repurchase agreements (government securities ATS), including those operated by a bank, to comply with Reg ATS and compliance and the integrity of regulatory systems (Reg SCI).

The SEC requested comments on the proposal within 30 days of the proposal’s publication in the Federal Register.2

Read the full alert.


1. Securities Exchange Act Release No. 94062 (January 26, 2022) (Proposing Release) available at The SEC previously released a proposal to amend Reg ATS and Reg SCI to apply to government securities ATS. Securities Exchange Act Release No. 90019 (September 28, 2020) available at

2. During the SEC public meeting, SEC Chairman Gensler indicated that publication in the Federal Register could take up to six weeks.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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