SEC Division of Trading and Markets No-Action Letter: S3 Matching Technologies LP (Re: SEA Sections 15(a)(1) and 15(b))

No-action letter permitting the operation of a technology service that facilitates broker-to-broker communications regarding, among other things, trade routing instructions, without registration of the service as itself a broker-dealer. In addition to serving as a communications engine, the service also provides a variety of analytic tools intended to evaluate execution quality; however, the service would not itself make routing decisions based on those analytics. The service would charge fees based on, among other things, message levels, but the service would not impose fees that were directly related to the execution of transactions. The letter also contains a variety of other representations as to the extent of the services to be provided.

Cross Reference(s): Exchange Act Sections 15(a)(1) and 15(b); Lofchie's Guide to Broker-Dealer Regulation, Chapter 2: Registration Requirements. (Sections I.E, F. and G of the Chapter discuss a number of related no-action letters.)

View no-action letter and incoming letter in full here (links externally to SEC website).