National Market System Plan (NMSP)
What Is the National Market System Plan (NMSP)?
The national market system plan is a bunch of rules utilized essentially to choose unique stock symbols for securities trading on U.S. exchanges. The plan likewise covers other parts of equity securities trading activity, disclosure, and execution.
The Securities and Exchange Commission (SEC) laid out the national market system plan. Its creation was authorized by the U.S. Congress in 1975.
The plan is reconsidered and refreshed intermittently. The SEC posts proposed and last changes on its website and energizes remarks from the public.
How the National Market System (NMSP) Works
In the U.S., the national market system and national market system plans are governed by Section 11A of the 1934 Securities Exchange Act.
Section 11A incorporates amendments passed in 1975, known as the Securities Acts Amendments of 1975. Those amendments required the Securities Exchange Commission (SEC) to lay out a national market system structure for the U.S officially. markets.
This later prompted the enactment of Regulation NMS. The SEC's Regulation NMS contains four exhaustive parts that intensely depend on the NMS system for full adherence.
The national market system in the U.S. comprises of several market system plan parts.
The Intermarket Symbol Reservation Authority (ISRA) Plan
The ISRA plan was laid out to work on the viability and productivity of the U.S. national market system overall. It likewise looks to empower fair competition among all market participants.
ISRA's primary purpose is to deal with a uniform system for choosing, saving, and directing equity security symbols for individual securities.
Through the ISRA, securities are assigned a symbol of somewhere in the range of one and five characters which fills in as an organization's identifier for listing and trading activity.
Equity market exchanges are required to utilize rules from the ISRA while deciding and scattering data about new stocks they list.
Consolidated Tape System (CTS)/Consolidated Quotation System (CQS)
The Consolidated Tape Association is the manager of the Consolidated Tape System and the Consolidated Quotation System.
These two systems process equity exchange trade and quote data, separately. All of the major regulated U.S. equity exchanges are required to utilize the CTS and CQS.
Like essentially all U.S. national market system parts, the CTS and CQS procedures are additionally mandatory for options market exchanges.
Over the Counter (OTC) and Unlisted Trading Privilege (UTP) Plan
The OTC/UTP Plan is an alternative part, zeroing in on quote and trade processing for over-the-counter securities, otherwise called unlisted trading privileges securities.
OTC/UTP exchanges have less severe requirements for the stocks they list however are subject to the national market system structure in the U.S.
Inside the OTC/UTP Plan part, a designated UTP processor, known as the Securities Information Processor (SIP), merges and processes quote and trade data on OTC securities.
The SIP is responsible for transaction processing and quote scattering. UTP Plan data is frequently alluded to as UTP Level 1 data or Tape C data.
Features
- The national market system and national market system plans are administered by the Securities Exchange Commission.
- The national market system plan directs a few parts of securities trading in the U.S.
- The plan's emphasis is on directing the symbols utilized across all exchanges for listed stocks.
