United States Government Publishing Office publisher pbl distributor dst United States National Archives and Records Administration Office of the Federal Register author aut Government Organization text government publication eng FR Regulatory Information 2016_register executive 2018-02-08 article Part III Proposed Rules D09002ee1c7f552e6 D09002ee1c7f5544d United States Securities and Exchange Commission originator org United States Government Agency or Subagency The Securities and Exchange Commission ("Commission" or "SEC") is proposing to amend Rules 600 and 606 of Regulation National Market System ("Regulation NMS") under the Securities Exchange Act of 1934 ("Exchange Act") to require additional disclosures by broker- dealers to customers about the routing of their orders. Specifically, with respect to institutional orders, the Commission is proposing to amend Rule 606 of Regulation NMS to require a broker-dealer, upon request of its customer, to provide specific disclosures related to the routing and execution of the customer's institutional orders for the prior six months. The Commission also is proposing to amend Rule 606 of Regulation NMS to require a broker-dealer to make publicly available aggregated information with respect to its handling of customers' institutional orders for each calendar quarter. With respect to retail orders, the Commission is proposing to make targeted enhancements to current order routing disclosures under Rule 606 by requiring limit order information to be broken down into marketable and non-marketable categories, requiring the disclosure of the net aggregate amount of any payment for order flow received, payment from any profit-sharing relationship received, transaction fees paid, and transaction rebates received by a broker-dealer from certain venues, requiring broker- dealers to describe any terms of payment for order flow arrangements and profit-sharing relationships with certain venues that may influence their order routing decisions, and eliminating the requirement to divide retail order routing information by listing market. In connection with these new requirements, the Commission is proposing to amend Rule 600 of Regulation NMS to include a number of newly defined terms which are used in the proposed amendments to Rule 606. The Commission is also proposing to amend Rules 605 and 606 of Regulation NMS to require that the public order execution and order routing reports be kept publicly available for a period of three years and to make conforming changes to Rule 607. Finally, the Commission is proposing to amend Rule 3a51-1(a) under the Exchange Act; Rule 13h- 1(a)(5) of Regulation 13D-G; Rule 105(b)(1) of Regulation M; Rules 201(a) and 204(g) of Regulation SHO; Rules 600(b), 602(a)(5), 607(a)(1), and 611(c) of Regulation NMS; and Rule 1000 of Regulation SCI, to update cross-references as a result of this proposed rule. 81 FR 49432 https://www.govinfo.gov/app/details/FR-2016-07-27/2016-16967 2016-16967 fr27jy16-19 RIN 3235-AL67 8011-01-P Release No. 34-78309 File No. S7-14-16 https://www.govinfo.gov/app/details/FR-2016-07-27/2016-16967 https://www.govinfo.gov/content/pkg/FR-2016-07-27/html/2016-16967.htm https://www.govinfo.gov/content/pkg/FR-2016-07-27/pdf/2016-16967.pdf Brokers Dealers Registration Securities Reporting and Recordkeeping Requirements 80 p. 49432 49511 81 FR 49432 Title 17 Part 240 17 CFR Part 240 Title 17 Part 242 17 CFR Part 242 RIN 3235-AL67 Disclosure of Order Handling Information; Federal Register Vol. 81, Issue PRORULE 2016-16967 III SECURITIES AND EXCHANGE COMMISSION 2016-09-26 Release No. 34-78309 File No. S7-14-16 8011-01-P 2016-16967 Proposed rule.

The Securities and Exchange Commission ("Commission" or "SEC") is proposing to amend Rules 600 and 606 of Regulation National Market System ("Regulation NMS") under the Securities Exchange Act of 1934 ("Exchange Act") to require additional disclosures by broker- dealers to customers about the routing of their orders. Specifically, with respect to institutional orders, the Commission is proposing to amend Rule 606 of Regulation NMS to require a broker-dealer, upon request of its customer, to provide specific disclosures related to the routing and execution of the customer's institutional orders for the prior six months. The Commission also is proposing to amend Rule 606 of Regulation NMS to require a broker-dealer to make publicly available aggregated information with respect to its handling of customers' institutional orders for each calendar quarter. With respect to retail orders, the Commission is proposing to make targeted enhancements to current order routing disclosures under Rule 606 by requiring limit order information to be broken down into marketable and non-marketable categories, requiring the disclosure of the net aggregate amount of any payment for order flow received, payment from any profit-sharing relationship received, transaction fees paid, and transaction rebates received by a broker-dealer from certain venues, requiring broker- dealers to describe any terms of payment for order flow arrangements and profit-sharing relationships with certain venues that may influence their order routing decisions, and eliminating the requirement to divide retail order routing information by listing market. In connection with these new requirements, the Commission is proposing to amend Rule 600 of Regulation NMS to include a number of newly defined terms which are used in the proposed amendments to Rule 606. The Commission is also proposing to amend Rules 605 and 606 of Regulation NMS to require that the public order execution and order routing reports be kept publicly available for a period of three years and to make conforming changes to Rule 607. Finally, the Commission is proposing to amend Rule 3a51-1(a) under the Exchange Act; Rule 13h- 1(a)(5) of Regulation 13D-G; Rule 105(b)(1) of Regulation M; Rules 201(a) and 204(g) of Regulation SHO; Rules 600(b), 602(a)(5), 607(a)(1), and 611(c) of Regulation NMS; and Rule 1000 of Regulation SCI, to update cross-references as a result of this proposed rule.

Comments should be received on or before September 26, 2016. Theodore S. Venuti, Assistant Director, at (202) 551-5658, Arisa Tinaves Kettig, Senior Special Counsel, at (202) 551-5676, Steve Kuan, Special Counsel, at (202) 551- 5624, Amir Katz, Special Counsel, at (202) 551-7653, Chris Grobbel, Special Counsel, at (202) 551-5491, or Andrew Sioson, Attorney-Advisor, at (202) 551-7186 Division of Trading and Markets, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549. Brokers Dealers Registration Securities Reporting and Recordkeeping Requirements Disclosure of Order Handling Information , rule-comments@sec.gov http://apps.finra.org/datadirectory/1/marketmaker.aspx http://bit.ly/1mfme9M http://blogs.wsj.com/moneybeat/2014/06/13/payments-to-big-brokers-under-fresh-scrutiny/ http://nasdaq.cchwallstreet.com/NASDAQTools/PlatformViewer.asp?selectednode=chp%5F1%5F1%5F4%5F6&manual=%2Fnasdaq%2Fmain%2Fnasdaq%2Dequityrules%2F http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2367462 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2607302 http://www.batstrading.com/support/fee_schedule/bzx/ http://www.finra.org/industry/web-crd/web-eft-schema-documentation-and-schema-files http://www.morganstanley.com/institutional-sales/sec_rules_605_606 http://www.regulations.gov http://www.schwab.com/public/schwab/nn/legal_compliance/important_notices/order_routing.html http://www.sec.gov/comments/s7-02-10/s70210-428.pdf http://www.sec.gov/comments/s7-02-10/s70210.shtml http://www.sec.gov/comments/s7-23-15/s72315.shtml http://www.sec.gov/comments/s7-27-09/s72709-46.pdf http://www.sec.gov/comments/s7-27-09/s72709-8.pdf http://www.sec.gov/comments/s7-27-09/s72709.shtml http://www.sec.gov/marketstructure/research/otc_trading_march_2014.pdf http://www.sec.gov/rules/proposed.shtml http://www.sec.gov/spotlight/emsac/memo-rule-611-regulation-nms.pdf http://www.stern.nyu.edu/sites/default/files/assets/documents/2%20Bartlett%20and%20McCrary%20Shall%20We%20Haggle.pdf http://www.streambase.com/industries/capitalmarkets/smart-order-routing/ http://www.wsj.com/articles/SB10001424052702303281504579219962494432336 https://capitalmarkets.fidelity.com/app/item/RD_13569_21696.html https://www.interactivebrokers.com/en/software/tws/usersguidebook/mosaic/advanced_orders_panel.htm https://www.scottrade.com/online-brokerage/trade-quality-execution.html https://www.sec.gov/comments/265-28/26528-55.pdf https://www.sec.gov/rules/sro/nms/2016/34-77724.pdf https://www.sec.gov/spotlight/emsac/memo-maker-taker-fees-on-equities-exchanges.pdf https://www.tdameritrade.com/disclosure.page https://www.tradingtechnologies.com/help/xtrader/viewing-child-orders/ https://www.ubs.com/us/en/wealth/misc/orderroutingdisclosure.html https://www.wellsfargoadvisors.com/disclosures/legal-disclosures.htm www.sec.gov Vol. 81, no. 144 Office of the Federal Register, National Archives and Records Administration 2016-07-27 continuing daily deposited born digital 388 p. Table of Contents: AE 2.7: GS 4.107: AE 2.106: KF70.A2 https://www.govinfo.gov/app/details/FR-2016-07-27 P0b002ee1985bcac7 0097-6326 0042-1219 0364-1406 769-004-00000-9 000582072 f:fr27jy16 https://www.govinfo.gov/app/details/FR-2016-07-27 https://www.govinfo.gov/content/pkg/FR-2016-07-27/pdf/FR-2016-07-27.pdf https://www.govinfo.gov/content/pkg/FR-2016-07-27/xml/FR-2016-07-27.xml fdlp 49139 49516 DGPO 2018-02-08 2024-06-01 FR-2016-07-27 machine generated eng FR FR-2016-07-27 81 144