Regulation NMS
Also known as: Reg NMS
Regulation NMS is the set of rules governing how orders in US must be handled across the country's various exchanges and trading venues, with the central goal of ensuring investors get the best available price no matter where their order is sent. Adopted in 2005, its order protection rule requires trading venues to respect the best prices currently displayed anywhere in the market, which make up the , and generally prohibits a venue from filling an order at a worse price when a better one is available elsewhere.
Regulation NMS ties together much of how modern US structure functions. It is the reason a 's system has to consider prices across every exchange and rather than just the venue it happens to prefer, and it underpins the owe their clients. It also requires the continuous public dissemination of quotes and trades that feeds the , giving every participant access to the same basic pricing information regardless of which venue they use.
Regulation NMS has shaped much of the competitive, fragmented structure of US trading, where the same can trade across a dozen or more exchanges and simultaneously, all effectively required to respect the same best available price. It has also drawn ongoing debate, since the same rules that guarantee price protection have also been linked to the rise of strategies built specifically around exploiting the speed differences between how fast different venues update and enforce those prices.