The rule changes are intended to increase the level of transparency available to market participants and improve market monitoring of trading platforms. Currently, the rules for ATSs are the same as those for ordinary securities firms.

The new regulatory regime, based on the Committee of European Securities Regulators Standards for regulating ATSs (CESR Standards), was initially scheduled for introduction in August 2003. But the level of feedback was such that the watchdog has extended the deadline by eight months to 1 April 2004, to give firms more time to comply.

Gay Huey Evans, director of the FSA’s markets and exchanges division says: "It is important to enhance the standards of monitoring and transparency in all markets to ensure that consumers and investors are adequately protected and to maintain market confidence. By introducing these standards, we want to encourage greater comparability and therefore increase competition between Alternative Trading Systems and other execution venues."

While dismissing ATS operator concerns about implementation of the new regime ahead of the final revisions to the EU's Investment Services Directive, the FSA took on board other issues by:

• limiting the pre-trade transparency obligations of ATS operators to equity markets only;
• limiting the scope of post-trade transparency obligations of ATS operators to more closely track existing practice in the various marketplaces;
• providing further feedback setting out our current more detailed thinking on transparency and market monitoring issues;
• simplifying some items of information that ATS operators will be obliged to provide to private and intermediate customers about their systems; and
• limiting the scope of the obligation to provide information about instruments traded on an ATS to private or intermediate customers of the ATS operator.