SIE Exam Question 704: Answer and Explanation

Question: 704

All but which of the following are correct regarding Electronic Communication Networks (ECNs)?

• A. They are a type of alternative trading system (ATS).
• B. They trade unlisted stocks and other non-exchange-traded products.
• C. Unlike dark pools, ECNs display orders in the consolidated quote stream.
• D. ECNs are required to register with the SEC as broker-dealers.

Correct Answer: B

Explanation:

Electronic Communication Networks (ECNs) are a type of alternative trading system (ATS) that trades listed stocks and other exchange-traded products. Unlike dark pools, ECNs display orders in the consolidated quote stream. ECNs are required to register with the SEC as broker-dealers.