Securities Lawyer's Deskbook
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Regulation ATS

Rule 300 -- Definitions

For purposes of this section, the following definitions shall apply:

  1. Alternative trading system means any organization, association, person, group of persons, or system:

    1. That constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange within the meaning of Rule 3b-16 under the Securities Exchange Act of 1934; and

    2. That does not:

      1. Set rules governing the conduct of subscribers other than the conduct of such subscribers' trading on such organization, association, person, group of persons, or system; or

      2. Discipline subscribers other than by exclusion from trading.

  2. Subscriber means any person that has entered into a contractual agreement with an alternative trading system to access such alternative trading system for the purpose of effecting transactions in securities or submitting, disseminating, or displaying orders on such alternative trading system, including a customer, member, user, or participant in an alternative trading system. A subscriber, however, shall not include a national securities exchange or national securities association.

  3. Affiliate of a subscriber means any person that, directly or indirectly, controls, is under common control with, or is controlled by, the subscriber, including any employee.

  4. Debt security shall mean any security other than an equity security, as defined in Rule 3a11-1 under the Securities Exchange Act of 1934, as well as non-participatory preferred stock.

  5. Order means any firm indication of a willingness to buy or sell a security, as either principal or agent, including any bid or offer quotation, market order, limit order, or other priced order.

  6. Control means the power, directly or indirectly, to direct the management or policies of an alternative trading system, whether through ownership of securities, by contract, or otherwise. A person is presumed to control an alternative trading system, if that person:

    1. Is a director, general partner, or officer exercising executive responsibility (or having similar status or performing similar functions);

    2. Directly or indirectly has the right to vote 25 percent or more of a class of voting security or has the power to sell or direct the sale of 25 percent or more of a class of voting securities of the alternative trading system; or

    3. In the case of a partnership, has contributed, or has the right to receive upon dissolution, 25 percent or more of the capital of the alternative trading system.

  7. NMS stock shall have the meaning provided in Rule 242.600; provided, however, that a debt or convertible debt security shall not be deemed an NMS stock for purposes of this Regulation ATS.

  8. Effective transaction reporting plan shall have the meaning provided in Rule 242.600.

  9. Corporate debt security shall mean any security that:

    1. Evidences a liability of the issuer of such security;

    2. Has a fixed maturity date that is at least one year following the date of issuance; and

    3. Is not an exempted security, as defined in section 3(a)(12) of the Act.

  10. Commercial paper shall mean any note, draft, or bill of exchange which arises out of a current transaction or the proceeds of which have been or are to be used for current transactions, and which has a maturity at the time of issuance of not exceeding nine months, exclusive of days of grace, or any renewal thereof the maturity of which is likewise limited.

Regulatory History

63 FR 70844, 70921, Dec. 22, 1998; 70 FR 37496, 37619, June 29, 2005; 74 FR 52358, 52372, Oct. 9, 2009

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