Regional and Other Exchanges – Series 7 Exam

🌐 Regional and Other Exchanges – Series 7 Exam

Understanding Trading Venues Beyond the NYSE

The Series 7 exam requires a solid understanding of where securities are traded, not just how they are traded. While the New York Stock Exchange (NYSE) is the most recognized, many securities also trade on regional and other specialized exchanges. Knowing the differences is essential for both the exam and your career in securities.

📈 What Are Regional Exchanges?

Regional exchanges are licensed marketplaces that allow securities trading outside of the NYSE and NASDAQ systems.
They often list:

• Stocks not meeting NYSE/NASDAQ requirements
• Stocks already listed nationally (dual listing)
• Regional-focused companies

Examples of Regional Exchanges:

• Boston Stock Exchange (BSE) (now part of NASDAQ OMX BX)
• Chicago Stock Exchange (CHX) (now part of NYSE Chicago)
• Philadelphia Stock Exchange (PHLX) (now part of NASDAQ)
• CBOE Stock Exchange (CBSX)

📊 Characteristics of Regional Exchanges

• Focus on local or regional companies
• Provide competition for order execution against national exchanges
• Often specialize in certain types of products (e.g., options, small-cap stocks)
• Enable dual listings to improve liquidity and visibility for issuers

🧠 Other Trading Venues You Must Know for Series 7

📍 NASDAQ

• A dealer market (OTC) using a network of competing market makers.

📍 Over-the-Counter Bulletin Board (OTCBB)

• An electronic system for trading securities not listed on an exchange but still reporting to the SEC.

📍 Pink Open Market (“Pink Sheets”)

• A market for non-reporting companies; less regulation and disclosure.

📍 Electronic Communication Networks (ECNs)

• Match buy and sell orders electronically without traditional market makers (e.g., Instinet, ArcaEdge).

📍 Alternative Trading Systems (ATS)

• Private networks like dark pools designed for institutional trading with limited transparency.

📝 Key Exam Points to Remember

• Regional exchanges list stocks and allow dual listings.
• OTCBB and Pink Sheets are not exchanges; they facilitate trading of unlisted securities.
• ECNs and ATSs are technology-driven alternatives, not traditional exchanges.
• Liquidity, transparency, and regulation levels differ significantly among trading venues.

🚀 Want Full Series 7 Exam Coverage?

Access complete breakdowns of trading venues, exam-focused quizzes, and practice questions that mirror the real Series 7 format.

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