Electronic Communication Networks

Go to the New York Federal Reserve's website, http://www.ny.frb.org/rmaghome/ curr_iss/ci6-12. html, to read "The Emergence of Electronic Communication Networks (ECNs) in the U.S. Equity Markets," by James McAndrews and Chris Stefanadis, researchers at the Federal Reserve Bank of New York.

After reading this article, answer the following questions: 1. What is an ECN and how does it differ from a traditional market such as the

2. List and briefly describe the four potential advantages of an ECN as identified by the authors.

3. What risk is related to the fragmentation that may accompany the development of the ECNs?

Listing Requirements

Go to www.nasdaq.com/sitemap/sitemap.stm. On the sitemap there is an item labeled listing information. Select that item and identify the following items in Initial Listing Standards for the National Market System 1, 2, and 3 and the Nasdaq SmallCap Market for domestic companies:

1. Public float in millions of shares.

2. Market value of public float.

3. Shareholders of round lots.

Go to www.nyse.com and select the listed company item or information bullet. Under the bullet select the listing standards tab. Identify the same items for NYSE (U.S. Standards) initial listing requirements.

4. In what two categories are the listing requirements most significantly different?

Most of the information in this section applies to all securities traded on exchanges. Some of it, however, applies just to stocks, and in such cases we use the specific words, stocks or shares.

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