ETI, CoLo 2. Trading calendar. Member Sections.

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Sign up for newsletter And receive exclusive articles on securities markets. It is important to note that the basic function of a broker-operated ATS is an electronic manifestation of a previously manual trading process, when trading desks would first try to execute trades internally before sending the order to a public exchange. The vast majority of trades still occur at exchanges and ECNs.

ATSs are affiliated with registered broker-dealers and, accordingly, their activities are governed by the same rules and regulations that govern broker-dealer activities generally, including the provisions of the Securities Exchange Act and SEC Regulation SHO. When seeking best execution of their orders, market participants use trading tools that shift between providing displayed and non-displayed quotes, balancing the benefits of displaying a quote to achieve an execution versus not displaying a quote in an attempt to reduce market impact and potentially obtain price or size improvement on their order.

Increased competition among trading venues has led to a broad reduction in explicit trading costs for both institutional and individual investors. For example, retail brokerages take advantage of the lower transaction fees offered by ATSs to provide low trading commission fees to their customers.