Brokers may have to dish up more information on where they’re sending their client orders.
The U.S. Securities and Exchange Commission is proposing rules that for the first time would force brokers to provide standard data on where they send institutional clients’ orders to be completed. The rules, which the SEC agreed to propose at a meeting Wednesday, would require brokers to reveal data about potential conflicts of interest and how well they carried out orders for customers. Brokers would also need to publicly release the details on an aggregate level in reports, which would be posted on the SEC’s website.
“Investors expect — and deserve — to know how their orders are treated,” SEC Chair Mary Jo White said in remarks prepared for a meeting last Wednesday. “This proposal should provide investors with an important new tool to better assess whether a broker-dealer’s order routing practices are consistent with their investment objectives.”