Policy Patty Toolkit 

Making the world a little more compliant one toolkit at a time.


SEC Adopts Rules That Increase Information Brokers Must Provide to Investors on Order Handling

Posted on November 5, 2018 at 3:20 PM

The SEC announced that it has voted to adopt amendments that will require broker-dealers to disclose to investors new and enhanced information about the way they handle investors’ orders.

Specifically, the Commission has amended Rule 606 of Regulation NMS to require a broker-dealer, upon a request of a customer who places a “not held” order (e.g., an order in which the customer gives the firm price and time discretion), to provide the customer with a standardized set of individualized disclosures concerning the firm’s handling of the customer’s orders. The new disclosures will, among other things, provide the customer with information about the average rebates the broker received from, and fees the broker paid to, trading venues.

The new disclosures are designed to help investors better understand how the broker-dealer routes and handles their orders and assess the impact of their broker-dealers’ routing decisions on order execution quality. The Commission also adopted two exceptions designed to minimize the implementation costs of the new disclosure requirement on the broker-dealer industry, particularly small broker-dealers.

The release includes a Fact Sheet that summarizes these changes.

Read More:
https://www.sec.gov/news/press-release/2018-253" target="_blank">https/www.sec.gov/news/press-release/2018-253
Final Rule

Categories: Trading