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Regulation NMS

The US rule set that binds competing equity venues into one national market system, covering quote protection, market data, access fees and price increments.

Its four pillars are the order-protection-rule (no trading through a better protected quote), the access rule (fair access and a cap on exchange take fees), the sub-penny rule, and the market data rules that created the consolidated feeds.

The consequence is the structure traders actually live in: dozens of venues, a stitched-together nbbo, mandatory routing logic, and a permanent argument about whether fragmentation helps or hurts investors.

Example: a broker holding a buy order cannot simply fill it on its own venue at 50.02 when another exchange displays a protected offer at 50.01. It must access the 50.01 first or route an intermarket-sweep-order that clears it. Without the rule, internalising at an inferior price would be free.

Related: order-protection-rule, nbbo, sub-penny-rule, reg-ats

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