The newly adopted rule amendments are designed to:

• broaden the scope of entities that must adhere to Rule 605, which would include broker-dealers who introduce or carry 100,000 or more customer accounts
• specify that broker-dealers operating single-dealer platforms are required to prepare a separate report for activity specific to these platforms
• modify the categorization and content of order information reported under the rule
• require reporting entities to provide a summary report of execution quality
• improve transparency for execution quality
• facilitate investors’ ability to compare brokers and enhance competition in our markets
• change the scope of the standardized monthly reports required under Rule 605

The SEC also has updated rules that are expected to:

• replace three existing categories of non-marketable order types with four new categories of order types: midpoint-or-better limit orders, midpoint-or-better immediate-or-cancel orders, non-marketable limit orders, and non-marketable immediate-or-cancel orders
• update the current order size categories to base them on both notional dollar value and whether an order is for a fractional share, for an odd-lot, or for a round lot or greater rather than number of shares
• introduce four new order type categories: marketable immediate-or-cancel orders, market orders submitted with stop prices, marketable limit orders submitted with stop prices, and non-marketable limit orders submitted with stop prices
• expand the definition of “covered order” to include certain orders submitted outside of regular trading hours, certain orders submitted with stop prices, and non-exempt short sale orders

Finally, the SEC amended the content of the reports required under Rule 605 to implement the following updates:

• time-to-execution reporting categories will be modified to use more granular time-to-execution buckets with timestamp conventions of a millisecond or finer
• realized spread statistics will be required to be calculated using additional time horizons ranging from less than 100 microseconds to 5 minutes after the time of order receipt
• new statistical measures of execution quality will be required

For further details on the rule amendments, please refer to the Disclosure of Order Execution Information final rule on the SEC’s website. The amendments will go into effect 60 days following its publication in the Federal Register. The amendments have a compliance date of 18 months after the effective date.  

Sources:

SEC Adopts Amendments to Enhance Disclosure of Order Execution Information (sec.gov)