Intermarket Trading System (ITS)
A communications network that linked major U.S. stock exchanges to route orders to the best available price.
What is Intermarket Trading System?
The Intermarket Trading System (ITS) was an electronic communications network that connected major U.S. stock exchanges—including the NYSE, AMEX, and regional exchanges—allowing brokers to route orders to whichever market offered the best price. Established in 1978 under SEC oversight, ITS was designed to fulfill the National Market System goal of linking fragmented exchanges into a unified marketplace. The system displayed real-time quotes from all participating markets, enabling brokers to send orders to competing exchanges when they offered better prices than the primary market. ITS was phased out in 2007 after Regulation NMS modernized the national market system with fully automated best-execution routing, replacing the older manual intermarket linkage with direct electronic connectivity between trading venues.
Example
Under ITS, a broker seeking to buy shares of IBM on the NYSE would see if the Chicago Stock Exchange or American Stock Exchange was offering a lower ask price and could route the order there instead, satisfying the best-execution obligation at a potentially lower cost for the client.
Source: SEC — Regulation NMS Final Rule