Finally, for government securities that deal only in government securities or repurchase agreements, ATS are not required to comply with the rules applicable to ATS trading NMS shares, including ATS Rule 304. [58] Rule 304 requires that only NMS Share ATS file a public form ATS-N disclosing how the TTY of NMS shares and the ATS-related activities of the brokerage-dealer operator and its affiliates take place there. The disclosure of Form ATS-N shall be subject to verification by the Commission and an NMS ATS inventory may only be used if Form ATS-N is effective. ATS engaged in transactions in government securities or repo are also not required to comply with the notification and execution provisions of Rule 301(b)(3)[59] and the related fee restrictions of Rule 301(b)(4),[60] both of which apply only to the NMS share business of an ATS. The Commission proposes to amend Rule 301(b)(2)(viii) to clarify that ATS of NMS shares and ATS of government securities are required to file reports under section 242.304 and that ATS that are not ATS of NMS shares or government securities are subject to Rule 301(b)(2). A dealer-dealer may be the registered dealer-dealer for several types of amphetamine-type stimulants that trade in different types of securities (eg. e.g., NMS Stock ATS and non-NMS Stock ATS) or a broker-dealer may be the registered dealer for multiple ATS that trade the same type of securities, but are separate and distinct from each other (e.g., a dealer who trades and starts Printed Page 87120, two NMS stock ATS, each maintaining a separate order book governed by different priority and order interaction rules for a security type). In both cases, each ATS is distinct from each other and must comply with the ATS regardless of the regulations. [150] The Commission proposes to amend Rule 301(b)(2)(viii) so that an SMT of NMS shares or an ATS of government securities operated by a dealer-dealer that is a registered dealer-dealer for more than one ATS must independently comply with the ATS Regulations, including the filing requirements of Rule 304.
The Commission considers that it is clear from the proposed text that the proposal would not require compliance with the enhanced transparency requirements of the ATS Regulation for ATS other than ATS on NMS shares or ATS for government bonds. For example, under the proposal, for an ATS that indicates in its first operational report on ATS that the ATS trades in government securities and corporate bonds, a broker-dealer would be the operator of broker-dealers for two types of ATS that would be distinct with respect to trading in those securities and would independently comply with the ATS Regulations. These two types of TTY would be (1) a TTY of government securities, which would file a Form ATS-G with respect to government securities, and (2) a TTY of non-governmental securities, which would file a TTY Form with respect to corporate debt. [151] In addition, each of the two ATS should comply with the conditions of the ATS Regulations, including the adoption of written guarantees and written procedures to protect confidential commercial subscriber information for ATS under Rule 301(b)(10) and the maintenance and maintenance of records for ATS under Rule 301(b)(8). [152] The SEC is in a busy rule-making season. While the SEC`s volume has been impressive, the speed with which it publishes proposals and the shortened timelines for comments it offers mean that the SEC and market participants may not have the opportunity to meaningfully consider the impact of the proposed rules. The ATS Regulation and related rules provide an exception to the definition of “exchange” under section 3(a)(1) of the Exchange Act,[32] as well as other regulatory requirements that ATS must meet in order to achieve and maintain its eligibility for the exemption.