A Dark Pool Is an Undisplayed ATS

Rule 7 of 7 in this unit1.2.1

1.2.1 Types of Markets

SIE outline 1.2.1

A Dark Pool Is an Undisplayed ATS

An alternative trading system whose orders aren't shown publicly. A venue inside the secondary market. NOT a fifth market type on this outline.

The method for this kind of question

Count to four: no fifth market type

Now answer

1 question on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

A pension fund sells a block of NYSE-listed stock directly to a mutual fund through an ATS, with no broker-dealer involved. This is:

A. The primary market B. The third market C. The fourth market D. The exchange market, since the stock is NYSE-listed

How sure are you?

Sure Fairly sure Guessing

Correct: C. Two institutions dealing directly with no broker-dealer between them is the fourth market.

A. The issuer is not a party; nothing here is primary.

B. The third market requires a broker-dealer on one side; there is none here.

D. Confuses where a stock is listed with where this particular trade happened.

Unit: SIE outline 1.2.1

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