What is the primary function of brokered markets?

Brokered markets primarily serve to facilitate trades through a search-brokerage mechanism that occurs away from public exchanges. In these markets, brokers act as intermediaries, matching buyers and sellers and providing access to assets that may not be easily traded on traditional exchanges. This setup is particularly beneficial for illiquid securities or when the parties involved require confidentiality. It allows for more personalized service, as brokers can leverage their networks and expertise to connect buyers and sellers effectively.

In contrast, other options refer to different market structures—trading executed on public exchanges typically occurs in centralized markets with standardized procedures, while facilitating transactions between public and private sectors suggests a different role that does not align with the primary function of brokered markets. Direct trades between investors without intermediaries describe a bilateral market, which diverges from the characteristics of brokered markets where intermediaries play a crucial role.