The Reg NMS is intended to assure that investors receive the best (NBBO) price executions for their orders by encouraging competition in the marketplace.
In 1975, Congress passed the Securities Acts Amendments of 1975, authorizing the SEC to facilitate a national market system.
Some of the more notable rules include:[4] 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.
This "micromanagement" of complicated market mechanics has been blamed for unintended consequences, including the rise of high-frequency trading.
[1] 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.