What is an electronic communication network?
An electronic communication network (ECN) is a forum or network that is totally computerized, which expedites the trading of financial products away from the traditional stock exchange. Currencies and stocks are the main instruments which are traded on electronic communications networks.
Where have you heard about electronic communication networks?
In order to trade with an ECN one must hold an account or subscribe to a broker that provides direct access trading. The Instinet was the first form of an electronic communication network and was established in 1967.
What you need to know about electronic communication networks.
Electronic communication networks run by extensively circulating orders placed by market makers to a mediator and allows the orders to be completed in part or whole. The advancement and growth of ECNs was supported through changes in regulatory law which encouraged the “linking of all markets for qualified securities through communication and data processing facilities”. ECNs have operated as closed books forums in the past, meaning that participants interaction was limited to that of other participants of the network. However, this is starting to change.
Find out more about electronic communication networks.
If you are interested in electronic communication networks, see our page on quotation systems.