National Best Bid and Offer (NBBO) Explained for Australians in 2025

National Best Bid and Offer (NBBO) is quickly becoming a buzzword in Australian trading circles, but for many investors, its significance is still shrouded in confusion. As 2025 ushers in a new era of market transparency and technological upgrades, understanding NBBO is critical for anyone buying or selling shares on the ASX or Chi-X. Here’s how NBBO is reshaping the landscape—and what it means for your bottom line.

What is NBBO and Why is it Gaining Traction in Australia?

NBBO refers to the highest price a buyer is willing to pay (best bid) and the lowest price a seller is willing to accept (best offer) for a security, aggregated from all trading venues across a national market. In the US, NBBO is a regulatory standard. In Australia, the concept is now front-and-centre, thanks to increasingly fragmented trading venues and a regulatory push for greater investor protection.

• Market Fragmentation: With the ASX no longer the sole player—Chi-X (now Cboe Australia), and other dark pools also in the mix—NBBO ensures investors see the best available prices, regardless of venue.

• Regulatory Momentum: ASIC’s 2024-2025 market integrity updates have further prioritised best execution, encouraging brokers to consider NBBO in their order routing protocols.

• Tech-Driven Transparency: The rise of electronic trading platforms and retail apps means NBBO data is more accessible to everyday investors, not just institutional players.

How NBBO Impacts the Everyday Investor in 2025

For years, the best available price for a share depended on where your broker sent your order. Now, with NBBO integration, brokers can scan multiple venues to ensure your trade is executed at the most favourable price—reducing costs and boosting transparency.

• Price Improvement: Suppose BHP shares are bid at $48.25 on ASX and $48.28 on Cboe. NBBO ensures your buy order will be filled at $48.25, rather than a higher price on a single venue.

• Reduced Information Asymmetry: With all investors accessing the same best prices, there’s less room for market makers or high-frequency traders to exploit gaps between venues.

• Real-Time Visibility: Modern trading platforms now display NBBO data as a standard, allowing you to time trades for optimal execution.

In practice, this means fewer missed opportunities and fairer deals, especially for high-volume or frequent traders. For example, in 2025, leading Australian brokers like SelfWealth and CMC Markets have rolled out NBBO-powered order routing, slashing average transaction costs for retail clients.

Regulatory and Technological Developments in 2025

NBBO isn’t just a technical upgrade—it’s a response to policy shifts and investor demand for fairness. Here’s what’s new in 2025:

• ASIC’s 2025 Best Execution Review: The regulator’s latest review found brokers who incorporated NBBO routing achieved up to 0.7% better pricing per trade compared to those using single-venue execution.

• Mandatory NBBO Data Access: From March 2025, all retail brokers are required to provide NBBO data to their clients, per ASIC’s new transparency guidelines.

• API Integration for Robo-Advisers: Automated investment platforms now use NBBO APIs to optimise trade execution, benefiting both passive and active investors.

These changes mean retail investors are, for the first time, on an almost equal footing with institutional traders when it comes to price discovery and execution quality.

What to Watch: Practical Tips for Using NBBO in Your Trading

• Check Your Broker’s Execution Policy: Not all brokers are created equal—look for explicit NBBO integration and real-time data access.

• Monitor Spread Movements: Tighter spreads often signal healthy NBBO functioning. Watch how spreads behave around major news or market open/close times.

• Leverage NBBO Tools: Some platforms now offer NBBO heatmaps or alerts—use these to time your trades more effectively.

As Australia’s trading landscape evolves, NBBO is set to become the gold standard for price transparency and execution. Whether you’re a seasoned investor or a first-timer, understanding and using NBBO can make a tangible difference to your portfolio returns.