3 rules of NASDAQ - Is it same in NSE

@Nithin,

In a book Value in Time… came across following statement from author…
"I would like to point out
three basic rules that govern the largest stock markets (NASDAQ, New
York Stock Exchange, etc.):

  1. The price precedence rule says that if you offer to sell a stock at the
    lowest price, your offer will be executed first. (If simultaneously John
    offers to sell his shares at $10, Jim at $10.01, and Martin at $9.99,
    Martin’s order will be executed first.) This guarantees that buyers also
    get the best price for the stock they purchase. Buy orders that offer the
    highest buying prices are also executed first.
  2. The time precedence rule says that buy or sell orders that have the
    same price are ranked in their order of submission: The first to arrive is
    executed first. (If John offers to sell his shares at $10, and five seconds
    later Martin also offers his shares at $10, John’s order will be executed
    first, followed by Martin’s.)
  3. A lesser-known rule is called the public order precedence rule. This
    rule states that members of a public exchange cannot execute their
    own orders ahead of orders from the general public that are standing
    atthesameprice.Thisrulewascreatedtoincreaseinvestorconfidence
    that members of the exchange will not use their superior information
    to their advantage by trading ahead of the public."

firs 2 points are clear and fine. Please refer the 3rd point – public order precedence rule followed in NASDAQ. Is this so in NSE ?

No one really knows whats going on inside that building.

Some traders reported on this forum, their orders getting triggered beyond the high and low of the day.

As I am aware this rule is not applied on NSE, also we can’t compare rules of US markets to ours due to various reasons.
In US dark pools exits, also orders can be directly traded with liquidity providers, no need to send to exchanges unlike in India where all orders need to be routed to exchange. We have only order driven trades where as in US along with order driven trades we can have quote driven trades means bid and ask is defined by liquidity makers and not based on supply and demand( order driven).Also US rules are very complex and vary from exchange to exchange, different to dark pools, different to each liquidity provider, I personally opine in a way our rules are way easy and less complex hence easy to understand and difficult to manipulate.

we have only one rule…
we don’t follow any rule.