CFA Level I · CFA Level I Exam · Equity Issuance and Trading
Compared with an exchange, an alternative trading system (ATS) or dark pool is most likely characterized by:
An alternative trading system or dark pool is most likely characterized by no pre-trade transparency. Orders are not displayed before execution, which helps institutions limit market impact. Listing requirements and regulatory oversight of members are features associated with exchanges, not ATSs.
- Ano pre-trade transparency of ordersCorrect
- Bmandatory listing requirements for securities
- Ca regulatory role over its member firms
Explanation
Dark pools do not display orders before execution, which reduces market impact for large orders. Exchanges set listing requirements and typically have regulatory functions over members; ATSs generally do not.
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