Will market data vendors be permitted to round sub-penny quotations to whole-penny increments in their data displays in NMS stocks for which the Rule permits sub-penny quotations?
Market data vendors and other securities information processors are not permitted by Rule 603(c) of Regulation NMS (commonly called the “Vendor Display Rule”) to round the national best bid and offer (“NBBO”). The NBBO is the best bid and best offer for a security that is calculated and disseminated pursuant to the CTA Plan for exchange-listed stocks and the Nasdaq/UTP Plan for Nasdaq stocks. Consequently, if these plans disseminate an NBBO that is expressed in a sub-penny increment, and a market data vendor that is covered by Rule 603(c) chooses to display data for these NMS stocks, the vendor is required to display the NBBO without rounding. The requirement applies only to a display in a context in which a trading or order-routing decision can be implemented and does not apply to quotations that are not part of the NBBO.
Related Questions
- If the Electronic Pink Sheets displays three active priced quotations, is a broker/dealer required to call the market makers to verify their quotations appearing on the Electronic Pink Sheets?
- May an exchange also accept and round orders in NMS stocks that are explicitly priced in sub-penny increments above $1.00?
- Which Market Data Vendors does Picture Composer support?
