Subpart B — Regulation NMS — Rules 605 and 606

Rules 605 and 606 are the principal public-disclosure provisions of Regulation NMS governing order routing and execution quality. Rule 605 applies to market centers and requires the publication of monthly execution-quality statistics. Rule 606 applies to broker-dealers that route customer orders and requires quarterly public disclosure of routing practices plus on-request customer- specific routing reports.

Rule 605 was substantially updated by Commission action in March 2024 to expand scope and refine the statistics disclosed; the amendments carry a compliance date later than initial adoption, and firms should consult the adopting release for the phase-in.

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§ 242.605 Disclosure of order execution information.

(a) Monthly reports required.

Every market center shall make available for each calendar month, and for each NMS stock, an electronic report on the covered orders in NMS stocks that it received for execution from any person. The market center must make each report available free of charge at a specified internet location.

A "market center" includes:

- A national securities exchange; - A national securities association (i.e., a FINRA-operated trading facility, principally its ADF); - An alternative trading system (ATS); - An exchange market maker; - An over-the-counter market maker (wholesale market maker, etc.); and - Any other broker-dealer that executes customer orders.

The post-2024 amendments expand the set of entities required to publish Rule 605 reports, to include, among others, broker-dealers introducing a substantial number of retail orders; firms should consult the adopting release for their compliance status.

(b) Order categorization.

For each NMS stock, the monthly report must be categorized by:

1. Order type: - Market orders; - Marketable limit orders (limit orders at or better than the prevailing quote); - Inside-the-quote limit orders (between the quote but not marketable); - At-the-quote limit orders; and - Near-the-quote limit orders (within a specified range outside the quote). 2. Order size (by share buckets, e.g., 100–499, 500–1,999, 2,000–4,999, 5,000–9,999, and 10,000+ for non-fractional amendments; fractional-share support was added by the 2024 amendments). 3. Whether the order was held or not-held.

(c) Statistics disclosed.

For each category, the report must disclose:

- Number of covered orders; - Cumulative number of shares of covered orders; - Cumulative number of shares of covered orders executed at the receiving market center, and at other market centers to which the market center routed the order for execution; - Cumulative number of shares of covered orders executed within specified time buckets relative to order receipt (e.g., 0–99 microseconds, 100–999 microseconds, 1–99 milliseconds, 100–999 milliseconds, 1–29 seconds, etc.; the 2024 amendments refined the time buckets to reflect contemporary execution speeds); - For executed marketable orders, the average realized spread and the average effective spread, expressed in dollars and cents per share and as a percentage of the midpoint of the NBBO at order receipt; - For executed marketable orders, the average price improvement in dollars per share and as a percentage of the midpoint of the NBBO at order receipt; - For executed marketable limit orders and orders executable upon receipt, the percentage of shares executed at the quote, at prices better than the quote, and at prices worse than the quote; and - For non-marketable limit orders, execution rates and time-to-execution statistics.

(d) Form of report.

The report must be made available in a format that is: (1) uniform, (2) readily accessible to the public, (3) downloadable in a machine-readable format (XML or a successor specified by the Commission), and (4) free of charge.

(e) Summary statistics.

Beginning with the compliance date of the 2024 amendments, market centers must also publish a monthly summary report containing aggregated execution-quality metrics suitable for retail investor comparison. The summary report must be human-readable and include plain-English definitions of each statistic.

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Interpretive notes

Rule 605 — Interaction with Rule 5310

Rule 605 statistics are the principal public data source that members use to conduct the regular and rigorous review required by FINRA Rule 5310, Supplementary Material .02. However, Rule 605 data by itself is not sufficient: members must evaluate routing decisions in the context of their own customer order flow, including order types and sizes that may not be represented proportionately in a venue's aggregate Rule 605 report.