In a comment letter to the SEC, the Financial Information Forum ("FIF") offered an alternative approach to address the challenges of reporting "downstream order execution data" under Regulation NMS Rule 606 ("Disclosure of Order Routing Information").
According to the FIF, the amended NMS Rule 606 obligates Introducing Brokers ("IBs") to report information concerning execution data that is not in the hands of an IB. In order for them to report the required execution data to the end customer, IBs would have to obtain information from the executing brokers and trading centers. The FIF states that this would require changes to business processes and systems that would involve significant time and resources.
To ease the burdens on IBs, the FIF proposed that the SEC consider utilizing data required for held orders in Rule 606(a) to increase the Rule 606(b)(3)(i) disclosures for not-held orders routed by an IB to an executing broker. Additionally, the FIF recommended that the SEC consider aligning the start of the amended rule's data collection period with the start of the fourth quarter in 2019.
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