National Market System (NMS)

What is a ‘National Market System – NMS’

A national market system (NMS) is a system with two main functions:

1. To facilitate trading of OTC stocks whose size, profitability, and trading activity meet specific criteria.

2. To post prices for securities on the NYSE and other regional exchanges simultaneously, allowing investors to obtain the best price.

Explaining ‘National Market System – NMS’

The National Market System is sponsored by both the NASD and the Nasdaq. Compared to other OTC stocks, OTC stocks trading under the NMS system have a more comprehensive listing within newspapers.

Further Reading

  • Marketplace organization and marketability: NASDAQ, the stock exchange, and the national market system – [PDF]
  • Post-trade transparency on Nasdaq's national market system – [PDF]
  • Empirical evidence on the effects of delisting from the national market system – [PDF]
  • The Effect on Spread and Volume of Switching to the NASDAQ National Market System – [PDF]
  • Restructuring the Stock Markets: A Critical Look at the SEC's National Market System – [PDF]
  • Cyber Security in the National Market System – [PDF]
  • Bid-ask spreads around earnings announcements: Evidence from the Nasdaq National Market System – [PDF]
  • Testing for liquidity gains in the market reaction to NASDAQ national market system phase-ins – [PDF]
  • Monthly Regularities in the OTC National Market System – [PDF]
  • The national market system – [PDF]