FACT SHEET

Disclosure of Order 

Execution 

Information

U.S. SECURITIES AND EXCHANGE COMMISSION PAGE 1 OF 2

Why This Matters

Rule 605 was adopted more than two decades ago to help the public compare and evaluate 

execution quality among different market centers. Although Rule 605 has provided visibility 

into execution quality at different market centers, the content of the disclosures required by 

Rule 605 has not been substantively updated since it was adopted. The speed and nature 

of trading have changed dramatically. Further, variations in execution quality across brokerdealers may be difficult to assess using current Rule 605 reports and the order routing 

reports required under Rule 606 of Regulation NMS. Modernized and enhanced execution 

quality reporting would better help the public compare and evaluate execution quality among 

different market centers and broker-dealers and thereby increase transparency of order 

The Securities and Exchange Commission proposed amendments to update the disclosure 

required under Rule 605 of Regulation NMS for order executions in national market system 

stocks, which are stocks listed on a national securities exchange. Specifically, the proposed 

amendments would: 

● Expand the scope of entities subject to Rule 605 by requiring broker-dealers with a larger 

number of customer accounts, single dealer platforms, and entities that would operate 

qualified auctions being proposed separately in an order competition rule to make 

available to the public monthly execution quality reports;

● Amend the definition of “covered order” to include certain orders submitted outside of 

regular trading hours and certain orders submitted with stop prices;

● Amend the categorization of information required to be reported under the rule, including 

changing the order type categories and the order size categories to include fractional 

share orders, odd-lot orders, and larger-sized orders; 

● Eliminate time-to-execution categories in favor of average time to execution, median 

time to execution, and 99th percentile time to execution statistics, each as measured in 

increments of a millisecond or finer; 

● Amend the information required to be reported under the rule, including changing the 

realized spread statistics to 15 second and one minute realized spread and requiring 

new statistical measures of execution quality that could be used to evaluate price 

improvement and size improvement for all order types, additional price improvement 

statistics for market and marketable order types, and certain statistical measures that 

could be used to measure execution quality of non-marketable limit orders; and

● Enhance the accessibility of the required reports by requiring all entities subject to Rule 

605 to make a summary report available.
FACT SHEET | Disclosure of Order Execution Information

U.S. SECURITIES AND EXCHANGE COMMISSION Page 2 of 2

execution quality, increase the information available to investors, and help promote 

competition among market centers and broker-dealers.

How This Rule Would Apply

The proposed amendments would expand the scope of Rule 605 to include the following 

entities: (1) broker-dealers who introduce or carry 100,000 or more customer accounts; (2) 

single-dealer platforms; and (3) entities that would operate proposed qualified auctions.

The proposed amendments would include updates to the scope and content of the 

standardized monthly reports required under Rule 605.

First, the proposed amendments would: (1) 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; (2) modify the existing order size 

categories to base them on round lots rather than number of shares and include additional 

order size categories for fractional share, odd-lot, and larger-sized orders; and (3) create a 

new order type category for marketable immediate-or-cancel orders and replace three 

existing categories of non-marketable order types with three new categories of order types 

(beyond-the-midpoint limit orders, executable non-marketable limit orders, and executable 

orders with stop prices). The proposed amendments would also scope in non-marketable 

orders if they become “executable” during regular trading hours.

Second, under the proposed amendments, the content of the reports required under Rule 

605 would be amended as follows: (1) Average time to execution, median time to execution, 

and 99th percentile time to execution statistics, each as measured in increments of a 

millisecond or finer, would be required in lieu of current time-to-execution reporting 

categories. (2) Realized spread statistics would be required to be calculated after 15 seconds 

and one minute. (3) New statistical measures of execution quality would be required, 

including: average effective over quoted spread (a percentage-based metric that represents 

how much price improvement an order received), percentage effective and realized spread 

statistics that would make it easier to compare dollar-based statistics across stocks, a size 

improvement benchmark that could be used to calculate whether orders received an 

execution of more than the displayed size at the quote, certain statistical measures that could 

be used to measure execution quality of non-marketable orders, and additional price 

improvement statistics for market and marketable orders showing price improvement relative 

to the best available price in the market, which could be a displayed odd-lot price.

Finally, the proposed amendments would require all entities subject to the rule to make a 

summary report available that would be formatted in the most recent versions of the XML 

and PDF formats as published on the Commission’s website.

Additional Information:

The public comment period will remain open until March 31, 2023, or until 60 days after the date of publication 

of the proposing release in the Federal Register, whichever is later.