A 1994 study concluded dealers were colluding to maintain wide bid/ask spreads by concentrating market quotes in quarters instead of eighths. This study eventually led to new order handling rules that required quotes to be available to the public through
A) the NASDAQ market.
B) electronic communications networks (ECN).
C) high frequency trading (HFT).
D) algorithmic trading (AT).
E) intermarket trading system (ITS).

Question

Quizplus · Accepted Answer

The new order handling rules that were implemented to combat collusion among dealers by requiring quotes to be available to the public were enforced through electronic communications networks (ECN). Therefore, choice B is the correct answer. The other options, such as NASDAQ market, high frequency trading (HFT), algorithmic trading (AT), and intermarket trading system (ITS) are incorrect because they do not directly relate to the implementation of these new order handling rules.

A 1994 Study Concluded Dealers Were Colluding to Maintain Wide