What type of entity is Nasdaq CXC Limited?

• A. A commodity futures exchange
• B. An alternative trading system
• C. A regulatory body
• D. A stock exchange

Answer: (B)

Nasdaq CXC Limited is classified as an alternative trading system (ATS). An ATS is a trading venue that operates outside of traditional stock exchanges and allows for the matching of buy and sell orders through a system that is not regulated as an exchange. Nasdaq CXC provides a platform for the execution of trades in a manner that facilitates greater flexibility and efficiency for participants in the market.

It’s important to note that while Nasdaq CXC is a part of the broader Nasdaq structure, it does not operate under the same regulations or frameworks as a traditional stock exchange, which is designed to facilitate the public buying and selling of listed securities in compliance with stringent regulatory requirements. Being recognized as an alternative trading system indicates that it engages in trading activities that may differ in terms of rules and operational standards from a standard stock exchange.

The other entities listed, such as a commodity futures exchange or a regulatory body, do not align with the operational characteristics or regulatory environment of Nasdaq CXC. Therefore, the categorization as an alternative trading system accurately reflects its functionality and market role.