Financial Information Forum (FIF) industry comparison
In order to provide investors with a more consistent way of comparing order execution statistics across the financial industry, we are proud to display our execution statistics as a member of the Financial Information Forum (FIF). FIF—a voluntary financial industry group composed of member firms such as broker-dealers, exchanges, and vendors—serves as a central resource for objective commentary and analysis on industry initiatives and informs regulators about the impact of proposed regulation and other market structure changes.
As part of the FIF Rule 605/606 working group, we have volunteered to provide a standard set of quarterly execution statistics so that you can easily compare execution quality across firms. Current firms participating in the working group are Fidelity, Charles Schwab and Scottrade. All discount brokerage firms were asked by the FIF to participate in this working group, but others chose not to.
View RegOne's latest FIF Rule 605/606 Working Group report (PDF).
SEC Rule 605
The SEC's customer disclosure rule, SEC Rule 605, requires market centers to disclose monthly data about the quality of their trade executions. Each monthly report will disclose execution-quality data based on the previous month's trading activity.
Pursuant to the "Joint Industry Plan, Order Approving Plan Establishing Procedures Under Rule 605 by American Stock Exchange, Boston Stock Exchange, Chicago Stock Exchange, Cincinnati Stock Exchange, National Association of Securities Dealers, New York Stock Exchange, Pacific Exchange, and Philadelphia Stock Exchange" (Joint Industry Plan) the execution-quality data provided in the reports must be in a standard format.
Report for Fidelity's market centers
Quality measurement definitions (PDF)
SEC Rule 606
Under SEC Rule 606, broker-dealers that route orders on behalf of customers are required to prepare quarterly reports that disclose the following information:
- The percentage of total customer orders that were nondirected orders, and the percentages of total nondirected orders (defined as any order that a customer has not specifically instructed to be routed to a particular venue for execution) that were market orders, limit orders, or other orders
- The identity of the venues to which a significant percentage of total nondirected orders were routed for execution
- The percentage of total nondirected orders routed to the venue, and the percentages of total nondirected market orders, nondirected limit orders, and nondirected other orders that were routed to the venue
- Terms of the material aspects of the broker-dealer's relationship with each venue identified above, including a description of any arrangement for payment for order flow and any profit-sharing relationship
The reports are to be made public for each calendar quarter and published no later than one month after the end of the quarter. Another section of this rule requires annual public notification that this information is available.
Read the Fidelity SEC Rule 606 report for this quarter (PDF).
Pursuant to the rule, customers can request details on the identity of the venue, time of execution, and whether the order was directed to a specific venue per customer request in the six months prior to the request. Through a Fidelity representative, a customer may also request up to six months of this information in hard copy on all orders for a specific time period and/or on individual securities. The collection period for this information began on July 2, 2001. This information is available online although it is not required by SEC rules.