Alternative Trading System (ATS)
Registration for operating alternative trading systems for crypto securities, requiring broker-dealer registration as prerequisite, with fair trading procedures and market surveillance obligations.
Securities Exchange Act Section 3(a)(1), Regulation ATS 17 CFR 搂 242.300 et seq.
Capital Required
Minimum USD 25,000-250,000 net capital (as broker-dealer prerequisite)
Timeline
2-4 months (after broker-dealer registration)
Fees
USD 100-500 SEC filing + USD 2,000-5,000 FINRA + USD 1,500-3,000 annual
Regulatory Body
FinCEN / SEC / CFTC / FINRA / State Regulators / NY DFS
Legislative Framework
Bank Secrecy Act, State Money Transmitter Laws, Securities Exchange Act of 1934, Investment Advisers Act of 1940, 23 NYCRR Part 200 (BitLicense)
Last updated: June 2025
Key Requirements
Maintain broker-dealer registration as prerequisite with SEC and FINRA before registering ATS per Regulation ATS 搂 242.300.
File Form ATS-N with SEC detailing ATS operations, trading procedures, market surveillance, and fee arrangements per Regulation ATS.
Establish written trading procedures including order entry, matching algorithms, execution, and settlement rules that are fair and non-discriminatory.
Implement comprehensive market surveillance program monitoring for market abuse including price manipulation, wash trading, and spoofing per Regulation SHO.
Maintain order book transparency with published order book information or price quotations for all trading pairs.
Establish position limit controls preventing market participant dominance or excessive concentration in particular crypto securities.
Implement documented procedures for participant admission, suspension, and termination with objective criteria and fair hearing rights.
Conduct quarterly trading rule compliance audits and annual independent operational resilience assessments covering systems availability.
Application Process
Complete SEC Form ATS-N (Regulation ATS application) detailing ATS operations, technology platform, and trading procedures.
Prepare detailed written trading rules specifying order types, matching methodologies, pricing procedures, and settlement arrangements.
Document market surveillance program including trading pattern monitoring, abuse detection, and investigation procedures.
Establish position limit controls and documented procedures for participant risk management.
File Form ATS-N with SEC including all supporting documentation, trading rules, and compliance procedures.
Obtain SEC approval of ATS operations and Form ATS-N filing before commencing trading.
Publish trading rules and commence operation of ATS under SEC regulatory oversight.
Expected Total Timeline
2-4 months (after broker-dealer registration)
Ongoing Obligations
After obtaining your Alternative Trading System (ATS), these are the continuing compliance requirements you must maintain.
File Form ATS-N amendments within 10 days of material changes to trading procedures, fee structures, or operational processes.
Maintain and enforce written trading rules with documentation of rule modification review and member notification.
Monitor trading activity for market abuse with documented surveillance logs and investigation reports available for SEC review.
Maintain detailed participant records and trading activity records for minimum 6 years available for SEC examination.
Conduct quarterly trading rule compliance reviews and annual independent operational resilience assessments.
File annual financial reports and compliance certifications with SEC demonstrating operational adequacy and capital maintenance.
Report material trading violations, market manipulation incidents, and technological system failures to SEC within specified timeframes.
Cost Summary
Capital Requirement
Minimum USD 25,000-250,000 net capital (as broker-dealer prerequisite)
Application & Licensing Fees
USD 100-500 SEC filing + USD 2,000-5,000 FINRA + USD 1,500-3,000 annual
Jurisdiction Setup Cost
$100,000-$500,000+
Annual: $200,000-$1,000,000+
Other United States Licenses
Explore other license types available in United States.
MSB Registration
State Money Transmitter License
Broker-Dealer Registration
BitLicense
Investment Adviser Registration
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