Regulation NMS

Regulation NMS (or Reg NMS — Regulation National Market System) is a regulation promulgated and described by the United States Securities and Exchange Commission (SEC) as "a series of initiatives designed to modernize and strengthen the national market system for equity securities." It was established in 2007. It seeks to foster both "competition among individual markets and competition among individual orders" in order to promote efficient and fair price formation across securities markets. In 1972, before the SEC began its pursuit of a national market system, the market for securities was quite fragmented. The same stock sometimes traded at different prices at different trading venues, and the NYSE ticker tape did not report transactions of NYSE-listed stocks that took place on regional exchanges or on other over-the-counter securities markets. This fragmentation made it difficult for traders to comparison shop. In 1975, Congress authorized the SEC to facilitate a national market system.