Share Registration Requirements
Of all the stock exchanges, NADAQ has the most minimal requirements for registering shares. This is followed by American tock Exchange. The New York Stock Exchange has the most stringent registration requirements. In addition to the requirements for registering shares, companies whose shares are listed on stock exchanges must follow certain rules, which include the publication of quarterly reports, a request for the appointment of authorized persons and a public announcement of events that may affect the value of shares of these companies.
Electronic communication networks
Many traders are trying to find ways that would allow them not to use the services of a traditional broker. Instead, they gain access to trading through a so-called direct access broker. More details about the differences between them will be discussed in Chapter 3. The new electronic trading system, which has been intensively developed recently, is called the electronic communications network. According to the Securities and Exchange Commission, about 30% of the total number of shares registered on NADAQ, and 40% of the volume of shares in dollar terms are bought and sold using ECN.Similarly, about 96% of ECN trades are shares registered with NADAQ.
ECN allows buyers and sellers, meeting in the "electronic space", to carry out operations of buying / selling shares. These operations are introduced into ECN systems by market-makers on one of the stock exchanges or by the market-maker of OTC. Transactions are carried out without a broker-dealer, which allows users to save on commissions, which usually have to be paid when using more traditional forms of buying / selling shares.
ECN subscribers are retail investors, institutional investors, market makers and broker-dealers. Access to ECN is carried out by means of a special terminal or by direct dialing of the corresponding number when accessing the Internet. Orders are placed in ECN and can be viewed by all ECN subscribers. Then ECN executes orders, bringing together sellers and buyers. In most cases, buyers and sellers operate on conditions of complete anonymity, without specifying their personal data in orders for purchase or sale.
There are currently nine ECNs in the United States securities markets, including the Intinet, Iland, Bloomberg Tradebook, Archipelago, RED! Book, DRUT, Attain, NexTrade and Market XT. Individual investors mainly use Intinet, Iland or Archipelago.
Intinet. ECN Intinet, which started its work in 1969, is the oldest and largest of ECN. It operates around the clock, and its customers are residents of all corners of our world. Before joining the partnership with E * TRADE, which was held relatively recently, only institutional investors used the right of access to the Intinet network. In addition, Intinet is a minority shareholder of Archipelago.
INET. The second largest and “work experience” of ECN is Iland, which was founded in 1996 and the predecessor of which was the day trading system called Watcher. With the help of Iland technology, Intinet and Iland electronic communications networks have combined their listings into a single electronic market, but Intinet still serves institutional investors by offering their own set of value-added services. The majority owner of Iland is Datek, which uses this electronic communication network mainly for its trading in NADAQ. Iland attracted primarily day traders who liked its high speed, liquidity and flexibility in terms of trading rules, but nowadays many firms also use the services of Iland.Traders can access the Iland order system for free over the Internet, but when you want to bid, you must use the services of a direct access broker.
Archipelago. Archipelago also originates from the scope of day trading. Archipelago was founded in 1997 as a joint venture Terra Now Trading Townend Analytic. Archipelago differs from other electronic communication networks in that it uses martBook technology, which, based on the “success story”, actively searches for the optimal price in order to classify and route orders. This electronic communications network is especially liked by day traders.
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