Where can I see the SEC rule 606 reports for registered B/D?

[ronin266]

I just was interested, since the rule stipulates that ALL B/D need to report those numbers, and there is nothing regarding any minimum requirement, or retail/non-retail differentiation.

What you´re telling me, is that direct access firms do not have to report this thing because the orders go to the venues that the traders select, and there is no intermediation between the firm and the markets? (no market makers, internalization??, because I know that MMs buy order flow from prop firms, and there is some internalization stuff in the biggest firms at least).

 

[ronin266]

Thanks Don

Quote from Don Bright:

We clear with Goldman, and here is GS:

http://www.goldmansachs.com/compliance/Rule606/

All orders to to GS, then to market centers. And, since we don't "internalize or sell order flow" we are exempt from all this. We can choose the destinations of course, but still through GS.

You can also search Thomson:

http://www.tta.thomson.com/reports/

And/or go to your specific Clearing Firm.

Don

 

[ronin266]

Ok. Everything is clear, a guy sent me this link with the FAQ for Rule 606, and everything is there.

http://www.sec.gov/interps/legal/mrslb13.htm

Only Non-directed orders should be reported. I understand that these are the Managed routes, some algo/dp and anything that is internalized. In case that all the flow is goind to the clearing, then it must be disclosed from the clearing firm side (thanks Don for the GS report again).

Anyway, every BD should give the info regarding the orders to the traders upon request:

Customer requests for information on order routing.

"Every broker or dealer shall, on request of a customer, disclose to its customer the identity of the venue to which the customer's orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any, that resulted from such orders.

A broker or dealer shall notify customers in writing at least annually of the availability on request of the information specified in paragraph (c)(1) of this section."

http://taft.law.uc.edu/CCL/34ActRls/rule11Ac1-6.html

I suppose that I need to give another read to SEC rules



Thanks.

 

[Don Bright]

Quote from ronin266:

Thanks Don

Glad to help, and sorry that I had to check all this again myself. So much "stuff" going on... I guess my Compliance Officer earns her salary (Hi Diane, LOL).....

What an interesting last hour today in trading, right? I got a bit lucky, cancelled some offers, raised them a bunch, still got filled, nice in and out in SPY and GE.

Wonder what tomorrow will bring? Expiration and Greece election, all the "rumors" flying...... enough for another whole thread.

Don (going in early tomorrow, LOL).

 

[gtgtgt3]

Ronin,

You are NOT a customer of a proprietary trading firm. In most cases you are a member of the LLC. This reports is for FINRA BD's. You are never going to get this report from a prop trading firm because it doesn't exist....but I guess you can keep wasting your time asking about it and calling the SEC.

Quote from ronin266:


"Every broker or dealer shall, on request of a customer, disclose to its customer the identity of the venue to which the customer's orders were routed for execution in the six months prior to the request, whether the orders were directed orders or non-directed orders, and the time of the transactions, if any, that resulted from such orders.

Thanks.

 

[ronin266]

Quote from gtgtgt3:

Ronin,

You are NOT a customer of a proprietary trading firm. In most cases you are a member of the LLC. This reports is for FINRA BD's. You are never going to get this report from a prop trading firm because it doesn't exist....but I guess you can keep wasting your time asking about it and calling the SEC.

Why there are people that just cannot read the whole stuff before responding.

The info should be available from the clearing house anyway, since the BD is their "client" in case that they´re not a self-clearing b/d, and a "member" from the LLC would be a part of that, so the right is there. The B/D is supposed to have that info (at least in a raw form with some big spreadsheet/blotter), so a negation to show it to the client/LLC member/Class B shareholder would arise some suspicion.

 

[thunderbolttr]

Quote from ronin266:

Ok. Everything is clear, a guy sent me this link with the FAQ for Rule 606, and everything is there.

http://www.sec.gov/interps/legal/mrslb13.htm

Not quite everything is there. The SEC later created a separate de minimis exemption and provided a lot more details (and some modifications). See http://www.sec.gov/interps/legal/mrslb13a.htm#q20.

Also take a look at http://www.sec.gov/interps/legal/mrslb13a.htm#q7 which provides that orders from another broker/dealer generally aren't customer orders.

 

[ronin266]

Quote from thunderbolttr:

Not quite everything is there. The SEC later created a separate de minimis exemption and provided a lot more details (and some modifications). See http://www.sec.gov/interps/legal/mrslb13a.htm#q20.

Also take a look at http://www.sec.gov/interps/legal/mrslb13a.htm#q7 which provides that orders from another broker/dealer generally aren't customer orders.

Oh thanks . Well, but what B/D have less than 500 orders in a quarter??. I mean, a vast part of the professional traders in most "serious" b/d are HFT (both manual and algo), and only 1 trader can have in a day 200-300 (if manual) and 500-1000 (if algo) orders per day, many of with are non-directed orders.

In the case of orders originated from another B/D, well, the original b/d still have to give that info anyway.

By the way, didn´t seen the question about the "paid order flow" (13).

" a broker-dealer must disclose the "material aspects" of its relationship with its significant execution venues, including a description of any payment for order flow arrangement (such as a market maker's payments for marketable orders and an ECN's payments for non-marketable limit orders) and in-kind goods and services (such as T1 lines, clearing services, and reciprocal agreements for the provision of order flow) . In this context, "materiality" should be interpreted as those aspects of the payment for order flow arrangement that would be important to a reasonable investor in evaluating a broker-dealer's routing practices".

 

[thunderbolttr]

Quote from ronin266:

Oh thanks . Well, but what B/D have less than 500 orders in a quarter??. I mean, a vast part of the professional traders in most "serious" b/d are HFT (both manual and algo), and only 1 trader can have in a day 200-300 (if manual) and 500-1000 (if algo) orders per day, many of with are non-directed orders.

In the case of orders originated from another B/D, well, the original b/d still have to give that info anyway.

I think the main thing to recognize is that orders from professional prop traders are generally not "customer" orders (because prop traders are not customers and do not have customer accounts). At a typical prop firm you are just trading for the account of the broker/dealer itself so you would generate 0 customer orders despite having 100s of actual orders. So all your trading activity would never necessarily impact a Rule 606 report from anyone.

 

[gtgtgt3]

Why are there some people who can't understand something even after 4 pages of a thread. You are not going to get this report from a prop firm because it doesn't exist.

Quote from ronin266:

Why there are people that just cannot read the whole stuff before responding.