I have been looking this up and I feel like I keep running into different definitions. My understanding is that an ISO order is one which will get filled with the displayed quantity in a particular exchange's book until it needs to be routed to other market venues in order to comply with reg NMS.
Looking at http://usequities.nyx.com/markets/nyse-arca-equities/order-types (towards the bottom) it makes it sound like an ISO order will sweep down the levels of ARCA's book without regards to external quotes. This sounds like it's either a violation of reg NMS, or an exception in which the trader takes on the liability of having checked the NBBO himself. If it is the latter case, it is still different from the definition above.
So which one is it?