SIE practice questionmediumTrade Execution
Which of the following is required by Regulation NMS (National Market System) when executing orders for listed equities?
- AOrders must be routed to the market with the best displayed price.✓ Correct answer
- BOrders must be routed to the home exchange.
- COrders must only be filled by market makers.
- DOrders must be executed immediately or canceled.
Explanation
Why A — Orders must be routed to the market with the best displayed price.
Regulation NMS requires brokers to seek the best price across all trading venues. There is no requirement to use a specific exchange or market maker, nor do all orders have to be immediate or canceled.
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