Alternative Trading System - ATS

What Does Alternative Trading System - ATS Mean?
A trading system that is not regulated as an exchange, but is a venue for matching the buy and sell orders of its subscribers. Alternative trading systems are gaining popularity around the world and account for much of the liquidity found in publicly traded issues.

Regulation ATS was introduced by the SEC in 1998 and is designed to protect investors and resolve any concerns arising from this type of trading system. Regulation ATS requires stricter record keeping and demands more intensive reporting on issues such as transparency once the system reaches more than 5% of the trading volume for any given security.

Investopedia explains Alternative Trading System - ATS
Many alternative trading systems are specifically designed to match buyers and sellers who trade in very large quantities (primarily professional traders and investors). Also, institutions will often use an ATS to find counterparties for transactions, instead of trading large blocks of shares on the normal exchange, a practice that can skew the market price in a particular direction, depending on a particular share's market capitalization and trading volume.

Examples of alternative trading systems include, but are not limited to, electronic communication networks (ECNs), crossing networks and call markets.