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SEC proposes new disclosure rules for broker-dealers

Jaclyn Jaeger | July 15, 2016

The Securities and Exchange Commission this week voted to propose rules that for the first time would require broker-dealers to disclose the handling of institutional orders to customers. The proposed rules also would expand the information included in existing retail order disclosures. 

Currently, Rule 606 requires broker-dealers to disclose publicly, on a quarterly basis, certain aggregated order routing information for customer orders in NMS securities, and to disclose separately, to a customer upon request, certain customer-specific order routing information for the past six months. The term “customer order” is defined as an order that is not for the account of a broker-dealer, and is less than $200,000 for NMS stocks and less than $50,000 for options. 

Rule 606 currently does not require disclosure of order routing information for institutional-sized orders. At the time Rule 606 was adopted,...

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