What are Rule 605 and Rule 606 disclosures?

Summary

Rule 605 and Rule 606 disclosures are U.S. market transparency reports about execution quality and order routing practices. In this article’s context, they are useful for reviewing how brokers route orders and how execution outcomes are measured.

Definition

Rule 605 and Rule 606 disclosures are regulatory reporting frameworks intended to make order handling and execution more transparent. The article specifically points readers to Rule 606 information when reviewing a broker’s routing disclosures, and it also references execution-quality reporting alongside Rule 605. In practical terms, Rule 606 relates to order routing practices, while Rule 605 relates to order execution quality reporting. These disclosures matter because investor order flow can be split across many market centres, and the reports help investors assess where orders are going and how execution outcomes are being measured, although they do not by themselves tell the whole story for every individual trade.

Sources

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