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New Market Structure Rules Adopted by SEC

Disclosure of order execution, quotes and trade through reguired.

By John M. Baker, Esq.


The SEC posted releases adopting new market structure rules that the Commissioners voted to approve on November 15. Disclosure of Order Execution and Routing Practices, Release No. 34-43590 (Nov. 17, 2000); Firm Quote and Trade-Through Disclosure Rules for Options, Release No. 34-43591 (Nov. 17, 2000).

Release No. 34-43590 adopts Rule 11Ac1-5, requiring market centers that trade national market system securities to make monthly, electronic disclosures of basic information concerning their quality of executions on a stock-by- stock basis, and Rule 11Ac1-6, requiring brokers that route orders on behalf of customers to disclose information about the market centers to which they route a significant percentage of their orders.

The SEC says that the rules should greatly increase the opportunity for public investors to evaluate what happens to their orders after they submit them to a broker-dealer for execution and are intended to spur competition among market centers and broker-dealers to provide the best possible price and speed of execution for investor orders.

Release No. 34-43590 is available online at http://www.sec.gov/rules/final/34-43590.htm

Release No. 34-43591 adopts rules designed to better ensure that customers’ orders for exchange-traded options receive best execution. The release is available online at http://www.sec.gov/rules/final/34-43591.htm

For the SEC fact sheet on the new rules, see http://www.sec.gov/news/extra/faqmstrc.htm


Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to fundlaw-subscribe@egroups.com


Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.  


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