A defined Regulation NMS ownership or other affiliation under which a broker or dealer may directly or indirectly share in profits derived from execution of non-directed orders. Keep the non-directed-order execution context; this definition is narrower than the ordinary business meaning of a profit-sharing arrangement.
ReviewedEvidence1 sourceSectionPhrases & Idioms
Quick answer
Under Regulation NMS, a “profit-sharing relationship” is an ownership or other affiliation under which a broker or dealer may directly or indirectly share in profits derived from executing non-directed orders.
Key details
Canonical FormProfit-Sharing Relationship
Core MeaningA defined Regulation NMS ownership or other affiliation under which a broker or dealer may directly or indirectly share in profits derived from execution of non-directed orders.
Further guidance
History Boundary
Keep the non-directed-order execution context; this definition is narrower than the ordinary business meaning of a profit-sharing arrangement.
Meaning
Under Regulation NMS, a “profit-sharing relationship” is an ownership or other affiliation under which a broker or dealer may directly or indirectly share in profits derived from executing non-directed orders.
Usage Boundary
Keep the non-directed-order execution context; this definition is narrower than the ordinary business meaning of a profit-sharing arrangement.
Sources and evidence
Sources are shown with the role they play in this guide. Historical or style-sensitive claims are kept within the evidence boundary described above.
Actionable Indication of Interest is a current federal securities-regulation defined term. This guide preserves the rule-specific definition and boundaries instead of replacing it with informal market shorthand.
Administrative Data is a current Regulation NMS defined term for specified administrative, control, and technical messages in the market-data plan framework.
Affiliate of a Subscriber is a current Regulation ATS defined term. This guide preserves the rule-specific meaning and boundary instead of replacing it with informal market shorthand.
Under current U.S. Regulation NMS definitions, aggregate quotation size is the sum of the quotation sizes of all responsible brokers or dealers communicating bids or offers in an NMS security at the same price. Treat this as a U.S. securities-regulation definition; it should not be generalized to unrelated uses of aggregate size or quotation outside Regulation NMS.
Alternative Trading System is a current federal securities-regulation defined term. This guide preserves the rule-specific definition and boundaries instead of replacing it with informal market shorthand.
Auction Information is a current Regulation NMS term for specified, publicly disseminated exchange data generated leading up to and during securities auctions.
Under Regulation NMS, an automated quotation is a quotation displayed by a trading center that can be acted on through an automated facility meeting specified immediate-or-cancel response and update conditions. Treat this as a U.S. securities-regulation term. The definition is jurisdiction- and rule-specific, not a general dictionary label for every electronic market quote.
Under current U.S. Regulation NMS, an “automated trading center” is a trading center with systems, procedures, and rules capable of displaying automated quotations, identifying non-automated quotations as manual, and applying reasonable standards for changes between automated and manual status. This is a condensed rule-scoped explanation of 17 CFR § 242.600; the full definition contains multiple operational conditions and should be consulted for compliance work.
