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SEC proposes new rules expanding order-handling information available to investors

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SEC proposes new rules expanding order-handling information available to investors

The SEC voted to propose new rules that expand institutionaland retail order-handling information available to investors.

The new rules proposed July 13 make it compulsory for broker/dealersto disclose the handling of institutional orders to customers. SEC Chair Mary JoWhite said in a media release that the new rules would provide investors with moretransparency and a powerful tool to monitor broker/dealer routing decisions. Informationthat is already a part of existing retail order disclosures will be expanded asper the new rules.

"These proposed rules are intended to bring order handlingdisclosure in line with modern technology and market practice, providing valuableinformation to retail and institutional investors about how their orders are treated,"White said.

The proposed rules would require broker/dealers to provide areport on their handling of a customer's institutional orders with specified monthlydata for the previous six months. Institutional orders are orders in exchange-listedstocks that have a minimum original market value of $200,000.

Retail order disclosures will be expanded to include more directinformation about payments that broker/dealers pay to or receive from executionvenues. Broker/dealers also would be required to report by calendar month ratherthan quarterly and have separate reporting information for marketable and non-marketablelimit orders.

The SEC is seeking public comment on the proposal for 60 daysafter its publication in the Federal Register.