SIE Exam Question 958: Answer and Explanation

Question: 958

Which of the following is correct regarding Electronic Communication Networks (ECNs)?

• A. All registered investment advisers are permitted to become ECN subscribers.
• B. ECNs are not permitted to become members of FINRA.
• C. An execution occurs when the price of a buy order and the price of a sell order intersect on the ECN.
• D. All of the above are correct.

Correct Answer: C

Explanation:

ECNs are members of FINRA, and, typically, only broker-dealers and certain institutional traders are permitted to become ECN subscribers. An execution occurs when the price of a buy order and the price of a sell order intersect on the ECN.