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.

BREAKING DOWN '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.