Regulation NMS

Regulation NMS

Regulation NMS (or Reg NMS) is a regulation promulgated by the United States Securities and Exchange Commission (SEC). According to the SEC, Reg NMS is "a series of initiatives designed to modernize and strengthen the national market system for equity securities." It was published in the Federal Register in June 2005.

Components of Reg NMS:

1. Order Protection Rule - provides intermarket price priority for displayed and accessible quotations (Rule 611)2. Access Rule - addresses access to markets (Rule 610)3. Sub-Penny Rule - establishes minimum pricing increments (Rule 612)4. Market Data Rules include a) Allocation amendment – institutes a new Market Data Revenue Allocation Formula b) Governance amendment – creates advisory committees c) Distribution and Display Rules – governing market data (Rule 600, 601 & 603)

Firms AffectedSROs/Exchanges - ECNs and other executing broker-dealers (e.g., market makers, block positioners) - Broker-dealers routing ISOs

ee also

* National Market System

References

* [http://www.sec.gov/rules/final/34-51808.pdf Regulation NMS, from the SEC]
* [http://www.nasdaqtrader.com/content/marketregulation/regnms/regnms_factsheet.pdf Reg NMS Fact Sheet, from Nasdaq]


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