What is Rule 610 and how did it change the arbitrage game?

Rule 610 changed the HFT game in such a significant manner that it can be thought of as a different phase of the HFT algorithmic trading tradition. The ban resulted in HFTs being forced to engage in “spam and cancel” strategies that repeatedly attempted to get to the top of the order queue on a price move.

What did Reg NMS do?

The SEC issued the Regulation National Market System (Reg NMS) in 2005 to strengthen U.S. securities exchanges and account for changing technology. The regulation included four new rules related to order protection, improving access to market data, and decimalization of price quotes.

How many Reg NMS securities are there?

Image source: Sony. There are 14 separate “rules” that makeup Reg NMS (see Table 1 below), which are grouped into six main categories with some common themes: Definitions: Rule 600 defines concepts and terms, which is sometimes pivotal to how the later rules work.

When did Reg NMS go into effect?

2006
Reg NMS was fully implemented in 2006.

How many rules are there for Reg NMS?

There are 14 separate “rules” that makeup Reg NMS (see Table 1 below), which are grouped into six main categories with some common themes: Definitions: Rule 600 defines concepts and terms, which is sometimes pivotal to how the later rules work.

What does Reg NMS stand for in stock market?

Well, Reg stands for Regulation and NMS stands for National Market System. It was introduced in 2005 and became law in 2007. Reg NMS is a set of rules that defines how trading works in the U.S. for all listed stocks.

When did the Securities and Exchange Commission adopt Regulation NMS?

Regulation NMS. On June 9, 2005 the Securities and Exchange Commission (SEC) issued its release adopting Regulation NMS. Regulation NMS established substantive rules designed to modernize and strengthen the regulatory structure of the United States equities market.

When is FINRA in violation of Regulation NMS?

If non-compliance with the Order Protection Rule of Regulation NMS is found to exist, your firm may be found to be in violation of SEC Rule 611 of Regulation NMS. Below are links to the central web sites that provide copies of each of the three NMS Plans in which FINRA participates.