The National Market System (NMS) was introduced by the United States Securities and Exchange Commission (SEC) in 1975 in order to level the playing field for investors and promote fair and efficient markets. NMS facilitates transparency by regulating how all major exchanges disclose and execute trades and regulates the dissemination of public information.

The primary benefits of the NMS are that it ensures a fair and orderly marketplace, where all investors have access to timely, accurate, and relevant information. It also promotes fair competition between different market participants and encourages price stability. NMS outlines the minimum information that must be shared with the public and requires each market participant to make bids and offer prices publicly visible and available to both individual investors and large institutions.

NMS is well established and applies to virtually all US equity trading. It sets forth strict standards to ensure uniformity of trading and data disclosure. This includes rules relating to order routing and trading practices, order display requirements, mandated price protection, and trade-through rules. All of these regulations help create a more efficient and equitable market.

In 2005, the SEC released Regulation National Market System (Reg NMS) to further strengthen the rules that the NMS put in place and to ensure that the regulations kept pace with advances in technology. The regulatory changes in Reg NMS sought to create even greater transparency and competition in the markets. It enforced tighter controls on market access and centralized certain aspects of trading.

NMS and Reg NMS have increased the strength of the US stock market. They helped create an environment of trust and security for investors and market participants by reducing informational asymmetry. NMS and Reg NMS also paved the way for more advanced trading algorithms and practices, while still providing strong market integrity and investor protection.

In short, the National Market System (NMS) is a set of regulations put in place by the US Securities and Exchange Commission (SEC) to promote market transparency, reduce information asymmetry, and encourage fair and efficient markets. Reg NMS up dated the rules of the NMS keeping up with advances in technology. Both of these regulations provide a more level playing field for all investors and help ensure a safe and secure stock market.