Order Protection Rule

Dictionary Says

Definition of 'Order Protection Rule'

One of the provisions of Regulation NMS that ensures that investors receive an execution price that is equivalent to what is being quoted on any other exchanges where the security is being traded. The order protection rule requires that each exchange establish and enforce policies to ensure consistent price quotation for all NMS stocks, which include those on the major stock exchanges as well as many over-the-counter (OTC) stocks.  

The order protection rule is also known as "Rule 611", or the "trade-through rule".


Investopedia Says

Investopedia explains 'Order Protection Rule'

The order protection rule - and Regulation NMS as a whole - was instituted to make today's financial markets more liquid and transparent. Before the regulation was passed, existing "trade-through" rules did not protect investors at all times, especially on limit trades, where investors would sometimes get inferior prices to those being quoted on a different exchange.  

The rule aims to protect quotations for a given security across the board, so that all market participants can receive the best possible execution price for orders that can be executed immediately.

Regulation NMS was passed in 2005 by the Securities and Exchange Commission (SEC). 
Search results for

'Order Protection Rule'

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    ... or insurance are exempt from this rule.) Each member must ... SIPC insurance provides
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    ... or insurance are exempt from this rule.) Each member must ... SIPC insurance provides
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    ... in order to detect and prevent transactions that are excessive in size or frequency
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  • Series 6 Study Guide - Securities Markets - Order Qualifiers ...

    http://www.investopedia.com/exam-guide/finra-series-6/securities-markets/order-qualifiers.asp
    ... 2.10 Transacting Securities; 2.11 Order Qualifiers. 3 ... of 1988; 5.9 Securities Investors
    Protection Act of ... 6.4 Supervision; 6.5 FINRA Conduct Rule 2830: Investment ...
  • Series 26 Study Guide - Communications with Prospects and ...

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    ... misleading information, or which has omitted a fact necessary in order to make the
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    ... Securities Investors Protection Act of 1970. Tweet. Email Email. Print Print. Order
    Reprints Reprints. Feedback Feedback. Sales Activities - FINRA Conduct Rule ...
  • Series 6 Study Guide - Evaluation of Customers - FINRA Conduct ...

    http://www.investopedia.com/exam-guide/finra-series-6/evaluation-customers/finra-conduct-rule-2310.asp
    ... 2.10 Transacting Securities; 2.11 Order Qualifiers. 3 ... of 1988; 5.9 Securities Investors
    Protection Act of ... 6.4 Supervision; 6.5 FINRA Conduct Rule 2830: Investment ...

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