Electronic communication network

This article has multiple issues. Please help improve it or discuss these issues on the talk page. (Learn how and when to remove these template messages) This article needs to be updated. Please help update this article to reflect recent events or newly available information. (May 2015) This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Electronic communication network" – news · newspapers · books · scholar · JSTOR (February 2012) (Learn how and when to remove this message) (Learn how and when to remove this message)

An electronic communication network (ECN) is a type of computerized forum or network that facilitates the trading of financial products outside traditional stock exchanges. An ECN is generally an electronic system that widely disseminates orders entered by market makers to third parties and permits the orders to be executed against in whole or in part. The primary products that are traded on ECNs are stocks and currencies. ECNs are generally passive computer-driven networks that internally match limit orders and charge a very small per share transaction fee (often a fraction of a cent per share).^[1]

The first ECN, Instinet, was created in 1969. ECNs increase competition among trading firms by lowering transaction costs, giving clients full access to their order books, and offering order matching outside traditional exchange hours.^{[citation needed]} ECNs are sometimes also referred to as alternative trading systems or alternative trading networks.