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What did the SEC's Regulation NMS make the most important factor in securities trades?
AThe speed of the execution
BThe size of the order placed
CThe price of the securities
DThe location of the exchange
Answer & Solution
Correct answer: C. The price of the securities
1. Regulation NMS, the National Market System rule, became fully effective in 2007.
2. It makes price the most important factor in making securities trades.
3. Every order must therefore go to the trading venue offering the best price.
4. Regional exchanges, which had struggled to compete, benefited from that rule, because orders now follow price rather than habit or size.
5. Speed and location matter commercially but neither was made the governing test by the rule.
6. An electronic network linking the NYSE and many regional exchanges lets brokers make transactions at the best prices.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.7 Buying and Selling at Securities Exchanges_
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