FESCO Paper on Alternative Trading Systems

25 September 2000

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Alternative Trading Systems (ATS) offer electronic securities trading facilities outside the traditional trading channels. An expert group has studied the impact of such systems in depth. The group has prepared a comprehensive report identifying and assessing the benefits and risks associated with the emergence of ATS and analysing the current regulatory treatment of such systems, within Europe and elsewhere. The report proposes both a short term and a long term option for a harmonised regulatory treatment of such systems in Europe. To achieve a harmonisation of regulatory standards under the short term option, this expert group will in a next step develop agreed specific regulatory standards for ATS’s operating as investment firms under the terms of the current Investment Services Directive.

In preparing this paper, the expert group invited market participants (investment firms, exchanges, ATS’s and consumers as well as trade and professional associations) to respond to a “request for information” followed by a workshop in London in February. FESCO has submitted this paper to the European Commission to contribute to its preparation of a Green Paper on possible ISD amendments.

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