Definition of Electronic Communications Network (ECN)

any one of a number of electronic systems that displays and matches orders placed on exchanges and over-the-counter by market makers and traders. A prominent example is Inet, a business of Instinet Group Incorporated. Inet represents the consolidation of the order flow of the former Instinet ECN and former Island ECN, which was purchased mid-2002, giving it some 26% of trading in NASDAQ stocks. In 2005, Nasdaq announced it was buying Instinet Group, and will incorporate Inet into its operations.