What Is the National Market System Plan (NMSP)?
The national market system plan is a set of rules used primarily to select unique stock symbols for securities trading on U.S. exchanges. The plan also covers other aspects of equity securities trading activity, disclosure, and execution.
The Securities and Exchange Commission (SEC) established the national market system plan. Its creation was authorized by the U.S. Congress in 1975.
The plan is revised and updated periodically. The SEC posts proposed and final changes on its website and encourages comments from the public.
- The national market system plan regulates some aspects of securities trading in the U.S.
- The plan's focus is on regulating the symbols used across all exchanges for listed stocks.
- The national market system and national market system plans are administered by the Securities Exchange Commission.
How the National Market System (NMSP) Works
In the U.S., the national market system and national market system plans are governed by Section 11A of the 1934 Securities Exchange Act.
Section 11A includes amendments passed in 1975, known as the Securities Acts Amendments of 1975. Those amendments required the Securities Exchange Commission (SEC) to formally establish a national market system framework for the U.S. markets.
This later led to the enactment of Regulation NMS. The SEC’s Regulation NMS contains four comprehensive components that heavily rely on the NMS framework for full adherence.
The national market system in the U.S. consists of several market system plan components.
The Intermarket Symbol Reservation Authority (ISRA) Plan
The ISRA plan was established to improve the effectiveness and efficiency of the U.S. national market system overall. It also seeks to encourage fair competition among all market participants.
ISRA’s primary purpose is to manage a uniform system for selecting, reserving, and administering equity security symbols for individual securities.
Through the ISRA, securities are assigned a symbol of between one and five characters which serves as a company's identifier for listing and trading activity.
Equity market exchanges are required to use guidelines from the ISRA when determining and disseminating information about new stocks they list.
Consolidated Tape System (CTS)/Consolidated Quotation System (CQS)
The Consolidated Tape Association is the manager of the Consolidated Tape System and the Consolidated Quotation System.
These two systems process equity exchange trade and quote data, respectively. All of the major regulated U.S. equity exchanges are required to use the CTS and CQS.
Like nearly all U.S. national market system components, the CTS and CQS procedures are also mandatory for options market exchanges.
Over the Counter (OTC) and Unlisted Trading Privilege (UTP) Plan
OTC/UTP exchanges have less stringent requirements for the stocks they list but are subject to the national market system framework in the U.S.
Within the OTC/UTP Plan component, a designated UTP processor, known as the Securities Information Processor (SIP), consolidates and processes quote and trade data on OTC securities.
The SIP is responsible for transaction processing and quote dissemination. UTP Plan data is often referred to as UTP Level 1 data or Tape C data.