SEC Rule 606 Reporting

Rule 606(a) is the public quarterly report. It covers routing of held, non-directed customer orders in NMS stocks and listed options. NMS stocks are grouped as S&P 500 constituents as of the first day of the quarter and as other NMS stocks. Order types are split, including market, marketable limit, and non-marketable limit. The report identifies venues, the mix of orders sent to each venue, and the net aggregate amount of payment for order flow, profit-sharing, transaction fees, and rebates. Payment for order flow disclosure material aspects describe the terms of those arrangements. The report is produced in the Commission's XML schema and associated PDF renderer, posted on a free public website, and kept posted for three years.

Rule 606(b) is the customer-request path. Rule 606(b)(1) requires, on request, venue identity and related routing facts for the customer's orders over the prior six months. Rule 606(b)(3) institutional order routing disclosure goes further for not-held NMS stock orders: a customer-specific report covering the prior six months by calendar month, including child orders derived from the parent, directed and non-directed sections, principal handling, indications of interest, venue-level routing and execution facts, and average rebates or fees. That report is due within seven business days of the request, using the same XML and PDF formats, subject to de minimis exceptions in Rule 606(b)(4) and (b)(5).

Rule 605 is a different obligation. It concerns execution-quality statistics at market centers. Rule 606 concerns routing disclosure by the broker-dealer. Mixing the two populations, or treating a 605 file as 606 evidence, produces a report that cannot be defended.

FINRA exam requirements for order routing records follow the same chain. FINRA Rule 9217 treats failure to timely disclose or provide complete order routing information as a reportable violation type. Examiners commonly ask for the public file, the underlying order and venue data, rebate and fee support, material-aspects text, and evidence that a supervisor reviewed the output. Rule 17a-3 and Rule 17a-4 still require the firm to make and preserve the source records. FINRA Rule 3110 still requires the supervisory system around that work.

Classification is the first control. Held orders are those the broker is expected to attempt immediately. Not-held orders give price and time discretion. Directed versus non-directed status, NMS stock versus listed option, and marketable versus non-marketable limit status all change which disclosure path applies. If the OMS flag is wrong, every later total is wrong.

Routing capture is the second control. The source is usually the order management system, execution management system, and FIX or API route messages. Parent and child orders must stay linked. Rule 606(a) public reports focus on venues to which held orders were routed for execution. Rule 606(b)(3) customer reports use a broader venue concept that can include intermediate brokers that further route without executing. Re-routes that are not retained become unexplained venue percentages.

Economics is the third control. Netting rebates and fees for 606 quarterly reports should reconcile to venue invoices, payment-for-order-flow records, and internal ledgers. A report that uses a planning estimate instead of posted amounts will not survive a books-and-records request. Material-aspects text should describe the arrangements actually in force for that quarter, including profit-sharing or ownership that may influence routing.

Assembly produces the XML and PDF outputs. The population, grouping, venue list, and net amounts should remain traceable to source rows. A generator that cannot re-run from the same extract is not an operating record.

Controls, approvals, and supervisory review sit on both paths. A maker-checker review should cover data breaks, venue mapping, rebate reconciling items, and qualitative text before publication. A 606(b) request needs an owner, received time, seven-business-day clock for 606(b)(3), delivery evidence, and a retained copy of what was sent.

Reporting or examination readiness is the last control. The firm should be able to show the posted public file, the date it was posted, the source extract, the rebate and fee support, the review trail, and any amendment. CAT reporting is a separate order-lifecycle feed. It may help explain routing events, but it does not replace Rule 606 disclosure or the evidence package behind it.