SEC Postpones Reg NMS Regulations Amid Ongoing Legal and Market Uncertainties

The Securities and Exchange Commission (SEC) has announced a temporary exemption order, postponing the enforcement of several significant elements of Regulation NMS (Reg NMS). The delay is attributed to ongoing legal uncertainties and apprehensions about the market’s preparedness in the event of a government funding lapse. As detailed in an

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This exemption, which takes effect immediately, covers Rules 600(b)(89)(i)(F) and 612 (regarding minimum tick sizes), Rule 610(c) (limits on access fees), and Rule 610(d) (clarity of exchange fees at the point of execution). The new compliance deadlines for these rules are now set for November 2026, February 2026, and November 2026, respectively. Additionally, the SEC has temporarily excused exchanges from updating round lot definitions under Rule 600(b)(93) until 30 days after any appropriations lapse concludes, according to the press release.

This move comes after the U.S. Court of Appeals for the D.C. Circuit rejected a challenge to the 2025 compliance dates. SEC Chairman Paul S. Atkins highlighted that the order "offers the market greater certainty about upcoming compliance obligations" and is intended to "support stable market operations" amid ongoing legal and fiscal ambiguity, the press release noted.

Originally unveiled in 2022, these regulatory updates are designed to bring U.S. equity markets up to date by revising tick sizes, access fees, and lot sizes to boost liquidity and lower trading costs. For example, stocks trading below $0.015 on average will move to half-penny tick increments, and round lot sizes will be adjusted based on the security’s price, as outlined in a

. For high-priced stocks such as Tesla (TSLA) and Netflix (NFLX), round lot sizes will decrease to 40 and 10 shares, respectively.

Market players are already gearing up for these adjustments. BMLL Technologies estimates that around 1,700 tickers—accounting for 40% of U.S. equity trading activity—will see tick size changes in November 2025. The company observed that average spreads for 40-share lots could narrow by 25%, though differences between round and odd-lot spreads may remain until 2026.

These modifications also coincide with broader changes to market data, such as the New York Stock Exchange’s planned update in August 2025 to trade reporting, which will now send individual trades to consolidated data feeds. This update has harmonized odd-lot reporting between Level 3 and SIP (Securities Information Processor) data, providing traders with greater transparency.

Both supporters and critics recognize the challenges of rolling out these new rules. Elliot Banks, Chief Product Officer at BMLL, cautioned that these are "the most significant changes to U.S. equity data in years" and could impact execution algorithms and risk controls. "It is essential for market participants to grasp how changes in tick size, lot size, and data dissemination will affect their operations," he commented.

With the SEC’s extension of compliance dates, exchanges and brokers have more time to update their systems and inform investors. Nevertheless, the agency’s partial suspension of rule amendments is still under court review, so the ultimate implementation timeline remains uncertain.