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The Trade-Through Rule and Locked and Crossed Markets Provisions of Regulation NMS
Plain English Summary
The SEC is planning to change some rules that affect how stocks are traded. They want to remove the trade-through rule, which currently prevents trades from happening at a worse price than the best available price. They also want to get rid of rules about locked and crossed markets, which deal with how quotes for stocks are displayed. These changes will affect all agents who deal with NMS stocks. Agents should stay informed about these changes and prepare for how they might impact trading practices.
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The Securities and Exchange Commission ("Commission" or "SEC") is proposing amendments to Regulation NMS ("Regulation NMS") under the Securities Exchange Act of 1934 ("Exchange Act"). The proposed amendments would rescind the trade-through rule for NMS stocks, the provision regarding locking and crossing quotations for NMS stocks, and certain defined terms. The proposed amendments would also make conforming changes to other related provisions.