Alternative trading systems (ATSs)
An ATS provides a facility which brings together orders from buyers and sellers, and those currently carrying-on business in Ontario can be grouped into three categories:
- Securities lending
For a complete definition of an ATS, please refer to section 1(1) of Ontario’s Securities Act.
How to become registered as an ATS
To operate an ATS in Ontario, a person or organization must:
- register as a dealer with Ontario’s Securities Act
- become a member of a self-regulatory organization (SRO)
Form 21-101F2 must be filed with the Ontario Securities Commission (OSC) at least 30 days before the ATS proposes to begin business. The following information is required as part of completion of the form:
- a description of classes of subscribers
- a list of types of securities the ATS expects to trade
- a description of its market structure
- its constating documents and corporate by-laws
- the names of anyone involved in operating the ATS
- the manner of operation, procedures, means of access, fees, and a description of safeguards and training to be provided by the ATS
- a procedure for reviewing system capacity, security and contingency planning
Once the form is submitted to the OSC, it will be assessed and, if the registration request is approved, the OSC will notify the applicant.
These requirements include:
- filing Form 21-101F3 (quarterly report of ATS Activities) within 30 days after each calendar quarter
- reporting and settling all trades through a recognized clearing agency
- providing accurate and timely information to an information processor or an information vendor
- filing any significant changes to the information provided in Form 21-101F2
- maintaining dealer registration and meeting any requirements associated with its registration
The ATS must also meet any requirements applicable to an ATS under the rules and requirements of the SRO of which it is a member.
The OSC oversees the compliance by an ATS with applicable Ontario securities law. As part of its oversight, the OSC reviews required filings, such as, changes to information filed in Form 21-101F2.