SEC REGULATION NMS
(PDF, 523 pages).
Adopted Rule 603(a) will not require a market center to synchronize the delivery of its data to end-users with delivery of data by a Network processor to end-users. Rather, independently distributed data could not be made available on a more timely basis than core data is made available to a Network processor. Stated another way, adopted Rule 603(a) prohibits an SRO or broker-dealer from transmitting data to a vendor or user any sooner than it transmits the data to a Network processor.
Rule 603(a)(2) requires that any SRO, broker, or dealer that distributes market information must do so on terms that are not unreasonably discriminatory. These requirements prohibit, for example, a market from making its "core data" (i.e., data that it is required to provide to a Network processor) available to vendors on a more timely basis than it makes available the core data to a Network processor. c. Display of Consolidated Information For the reasons discussed above in section V.A.4, the Commission is adopting, as proposed and reproposed, Rule 603(c) (previously Exchange Act Rule 11Ac1-2), which substantially revises the consolidated display requirement. It incorporates a new definition of “consolidated display” (set forth in adopted Rule 600(b)(13)) that is limited to the prices, sizes, and market center identifications of the NBBO and "consolidated last sale information" (which is defined in Rule 600(b)(14)). The consolidated information on quotations and trades must be provided in an equivalent manner to any other information on quotations and trades provided by a securities information processor or broker-dealer. Beyond disclosure of this basic information, market forces, rather than regulatory requirements, will be allowed to determine what, if any, additional data from other market centers is displayed. In particular, investors and other information users ultimately will be able to decide whether they need additional information in their displays. In addition, adopted Rule 603(c) narrows the contexts in which a consolidated display is required to those when it is most needed – a context in which a trading or order-routing decision could be implemented. For example, the consolidated display requirement will continue to cover broker-dealers who provide on-line data to their customers in software programs from which trading decisions can be implemented. Similarly, the requirement will continue to apply to vendors who provide displays that facilitate order routing by broker-dealers. It will not apply, however, when market data is provided on a purely informational website that does not offer any trading or order-routing capability.
Securities Exchange Act of 1934, Section 9 -- Manipulation of Security Prices
a. Transactions relating to purchase or sale of security
It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange--
In reviewing these regulations:
1) Delivering market data through premium products ahead of transmission to a Network processor would seem to violate Rules 603(a) and 603(a)(2) of Regulation NMS.
2) Placing orders for which one has no intent to execute would seem to violate Section 9(a)(1)(A) of the Securities Exchange Act.