Given the extent of the changes made, CESR decided to provide interested parties with another opportunity to comment. This paper sets out proposed standards for ATSs in the European Economic Area (EEA) with a view to providing appropriate regulation under the ISD of investment firms operating ATSs. It builds on FESCO’s report to the European Commission on the Regulation of Alternative Trading Systems (ATSs) in Europe, which was published in September 2000 (Ref. FESCO/00-064c) The standards aim to ensure, in particular, that the integrity of the markets is protected, and also that users of ATSs are given adequate protection.

In response to comments received in the first round of consultation, CESR has narrowed the definition of an ATS (the ‘qualifying system’ to which the standards apply) to multilateral ATSs. However, this narrowing of the definition does not mean that CESR believes that there are no regulatory issues raised by trading activity outside multilateral ATSs. It is likely that further work will be conducted by CESR in this area, focusing specifically on the issue of transparency. The need for additional regulatory standards for ATSs arises because existing conduct of business rules do not fully address the particular risks posed by the nature of services provided via ATSs. CESR considers it important to move ahead with these additional standards, providing an appropriate interim regime, before the revised ISD comes into force.
See consultation paper on alternative trading systems (final round)

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