Thus, some have described it as an improper government intervention into private business affairs. Additionally, the order protection rule has been blamed for exacerbating market fragmentation, resulting in rising technology and exchange costs for market makers. Within Reg NMS, a section called the order protection rule has further been controversial because it requires traders to transact on a trading venue at the lowest price rather than on a venue offering the quickest execution or the most reliability, which can result in a worse overall price for institutional orders after execution. This "micromanagement" of complicated market mechanics has been blamed for unintended consequences, including the rise of high-frequency trading. Instead, Reg NMS dictates the specifics of how the market should execute trades. Reg NMS has been described as a shift away from the SEC's historical role of defining and then enforcing general duties and obligations of market participants. c) Distribution and Display Rules – governing market data (Rule 600, 601 & 603).b) Governance amendment – creates advisory committees,.a) Allocation amendment – institutes a new Market Data Revenue Allocation Formula,.Sub-Penny Rule - establishes minimum pricing increments (Rule 612).Order Protection (or Trade Through) Rule - provides intermarket price priority for quotations that are immediately and automatically accessible (Rule 611).Access Rule - addresses access to market data such as quotations (Rule 610).In 2005, the rules promoting the national market system were consolidated into REG NMS. In 1975, Congress passed the Securities Acts Amendments of 1975, authorizing the SEC to facilitate a national market system. This fragmentation made it difficult for traders to comparison shop. 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. In 1972, before the SEC began its pursuit of a national market system, the market for securities was quite fragmented. Established in 2005, its aim was to foster both "competition among individual markets and competition among individual orders" in order to promote efficient and fair price formation across securities markets.
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