Australia’s share market landscape is shifting in 2025, and Alternative Trading Systems (ATS) are emerging as a powerful force for retail and institutional investors alike. Once the exclusive domain of Wall Street, these platforms are now gaining traction down under, challenging the dominance of traditional exchanges like the ASX. Whether you’re a seasoned trader or just starting out, understanding ATS could open up new strategies and opportunities for your portfolio.
What Are Alternative Trading Systems?
ATS are privately operated trading venues that match buyers and sellers of securities—similar to stock exchanges but with greater flexibility and fewer regulatory constraints. In Australia, these systems are sometimes referred to as ‘dark pools’ or ‘multilateral trading facilities’ (MTFs), and they cater to investors seeking different liquidity, pricing, or anonymity than what’s offered by the main exchanges.
Key features of ATS include:
- Off-exchange trading: Trades occur outside the ASX, often with lower visibility to the broader market.
- Flexible order types: ATS can support block trades, algorithmic strategies, and custom order flows.
- Lower fees: Some ATS offer more competitive transaction costs than traditional exchanges.
Globally, the rise of ATS has been driven by the need for better execution on large orders and the desire for innovative trading solutions. In Australia, the trend has accelerated thanks to advances in technology, a push for more competition, and policy updates from ASIC in 2025.
2025 Policy Updates: How Regulators Are Responding
This year, the Australian Securities and Investments Commission (ASIC) introduced new rules to bring greater transparency and oversight to ATS. The changes are designed to level the playing field, protect retail investors, and ensure the stability of Australia’s financial markets.
Key 2025 regulatory changes impacting ATS include:
- Real-time reporting: All ATS operators must now report trades in near real-time, reducing the opacity that previously characterised ‘dark pool’ trading.
- Enhanced best execution standards: Brokers and fund managers using ATS are required to demonstrate that they seek the best outcomes for clients, not just the lowest fees.
- Stricter participant vetting: Only licensed entities that pass new compliance checks can operate or access ATS in Australia.
These reforms are intended to foster healthy competition with the ASX while protecting investors from price manipulation and market fragmentation.
Opportunities and Risks for Australian Investors
ATS are no longer just for institutional heavyweights. In 2025, several Australian brokers now offer retail access to select ATS platforms, making it possible for everyday investors to benefit from alternative liquidity pools.
Opportunities:
- Improved liquidity: ATS can match large trades with less price impact, helping investors get better deals on sizable transactions.
- Price discovery: With more venues to trade, price competition can sharpen, potentially improving execution for everyone.
- Access to niche products: Some ATS specialise in alternative assets or international securities that aren’t listed on the ASX.
Risks:
- Reduced transparency: Not all ATS publish real-time order books, making it harder to gauge market depth and fair value.
- Fragmentation: With more venues, liquidity can become scattered, sometimes increasing volatility or execution risk.
- Regulatory complexity: Keeping up with compliance obligations is essential, especially for active traders or those using automated strategies.
For example, a Melbourne-based wealth manager recently used an ATS to offload a large block of mining shares without moving the public price—demonstrating the subtle but significant impact of these platforms on local trading dynamics.
How to Access and Use ATS in 2025
If you’re curious about trading via ATS, start by checking if your broker offers access. Leading Australian platforms such as Chi-X (now Cboe Australia), Liquidnet, and ITG POSIT are popular choices. Some require minimum trade sizes or special permissions, so it’s worth researching their requirements.
Tips for getting started:
- Review your broker’s ATS access and order types.
- Understand the fees, execution policies, and reporting standards.
- Monitor ASIC updates for the latest compliance rules and investor protections.
For sophisticated traders, some ATS also offer APIs for algorithmic trading, opening the door to advanced strategies previously reserved for institutions.
The Bottom Line
Alternative Trading Systems are redefining how Australians buy and sell shares in 2025. With new regulatory protections, broader access, and the promise of improved execution, ATS are becoming an essential part of the modern investor’s toolkit. As with any innovation, understanding the benefits and risks is key to making the most of what these platforms have to offer.
