SEC Rule 606
SEC Rule 606 is a regulation established by the U.S. Securities and Exchange Commission (SEC) that requires broker-dealers to disclose information about the routing of customer orders in the equities market. The rule requires broker-dealers to publish quarterly reports that provide information about the venues where customer orders were routed for execution and the types of orders that were executed.
The purpose of SEC Rule 606 is to promote transparency in the equities market by providing customers with information about the routing practices of broker-dealers. This information can assist customers in evaluating the quality of execution they receive from their broker-dealers, as well as in determining whether a broker-dealer is directing orders to venues that are in the best interests of customers.
SEC Rule 606 requires broker-dealers to provide customers with quarterly reports that detail the venues where their orders were routed for execution. The reports must include data on the types of venues where trades were executed, such as electronic communication networks (ECNs) or dark pools. The reports must also include information on the types of orders that were executed, such as market orders, limit orders, or pegged orders.
SEC Rule 606 is a regulatory measure designed to promote transparency in the equities market by requiring broker-dealers to disclose information about the routing of customer orders. The information disclosed in these reports can assist customers in evaluating the quality of execution they receive from their broker-dealers and determining whether their orders are being routed to venues that are in their best interests.