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US - Adoption of rules about better Information from Brokers on Orders Handling

21/01/2019

On 2 November 2018, the Securities and Exchange Commission announced that it has adopted 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 “National Market System” (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 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.   

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