In a letter to SEC Chair Mary Jo White, the Investment Company Institute (ICI), the Managed Funds Association (MFA), and the Securities Industry and Financial Markets Association (SIFMA) detailed suggestions for improved order routing disclosure. The associations convened a working group comprised “a broad segment of industry participants” to develop a template for the disclosures, which it attached to the letter. The template includes 23 metrics to be reported per execution venue, including shares routed as actionable indications of interest and immediate or cancel orders, duration of orders posted, and information on fees and rebates, to name a few. According to the group, the current disclosures provided in Rules 605 and 606 are not specific enough and not presented in a uniform manner. Looking forward, the group argued that a final rule should take a flexible approach “so that information disclosures that become obsolete can be readily replaced with disclosures that become relevant.”
The letter came in response to a June speech by Chair White where she indicated that she had asked SEC staff to develop a recommendation for a rule “requiring disclosure of the customer-specific information that a broker is expected to provide to each institutional customer on request.” Chair White had argued that the rule was “necessary to ensure that the disclosed information is useful, reliable, and uniformly available on request to all institutional customers.”