Regulation NMS

But I think there does need to be a very honest determination of at what point you cut your losses.

Regulatory is always something that, you know, I'm ultimate, I'm very skeptical around the regulatory environment where, you know, in analog, it's actually very interesting for the perpetual futures was, I mentioned Reg NMS that was instituted after the GFC, which essentially broke the moat of the NYSE and NASDAQ around single stock trading.

I mean, they basically just So you're NASDAQ, you're NYSE.

You need the pricing, you need the transparency, you need the regulatory.

There's no launch date at all.

But beyond just being a notice, this venue is not operating under regulation NMS and it's not subject to fair access rules.

Why is that distinction so critical for anyone looking at this?

Well, I mean, it fundamentally changes the environment you're operating in.

Like regulation NMS is the traditional framework that ensures you get the best available price across all the different national exchanges.

Right.

It connects those fragmented markets.

Information barriers or Chinese walls are mandated specifically to prevent the research department from talking to the trading desk to stop exactly that.

To police all of this market behavior on a systemic architectural level, the SEC instituted Regulation NMS, which stands for the National Market System.

This was a sweeping modernization effort to link all the fragmented exchanges together.

The manual highlights three highly specific rules under Reg NMS that protect retail investors.

Well, Jim, thank you for joining us to explain both the backstory, some of the differences, and we'll be looking for those IPOs more s- uh, those who are changing their listings, see if it has any impact i- in addressing those concerns, and, uh, many more questions I could ask you about.

Yeah, a- again, this doesn't impact the way that everybody has to trade, right, because of Reg NMS kind of the same way.

So this is really just-

That's right

So today, you go through around nine different intermediaries of when you hit that buy button on Fidelity, Vanguard, Interactive Brokers or wherever until you own a stock.

The new SEC regulation basically says that if you are a Reg NMS stock, you can now structure it in a token format and sell it on the US ETF markets or US markets.

It could be stocks, it could be bundled stocks like ETFs and securities that you trade today.

So simultaneously, transfer agent laws and rules have also changed.

So don't want to trip over a short run test here, even in a year or two, as being the one and only test of whether there's product market fit for the U.S.

Rodrigo placed the order alongside the SEC's other moves, a possible revision of Reg NMS rules, a broker statement, and a proposed transfer agent rulemaking.

And yeah, I don't think it's the be all end all of like what tokenized securities will be necessarily.

But I think it's like a helpful, like animating factor to have more people come off the sideline.