medium · Market Microstructure lob
Under Regulation NMS Rule 611 (the Trade-Through Rule), if Exchange A displays a protected offer of 500 shares at 15.50 and Exchange B executes a 1,000-share buy order at 15.55, which of the following statements correctly identifies the regulatory status of this event?
- This is permitted, since Exchange B offered more depth (1,000 shares) than Exchange A's 500 shares at the top.
- This is permitted under Rule 612 whenever the execution price increment is exactly one cent wide.
- This is a violation of Rule 610's Access Rule, which governs discriminatory connectivity and quoting fees.
- This is a violation because Exchange B executed at a price inferior to the best available protected quote.
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