Let’s be honest, regulatory reporting can feel overwhelming. Between evolving SEC expectations and the pressure to maintain transparency, broker-dealers often find themselves juggling compliance with operational efficiency. If you’ve ever wondered whether your 606 reporting process is as smooth and accurate as it should be, you’re not alone.
That’s exactly why understanding SEC Rule 606 and using the right compliance tools matters more than ever. In this guide by Capital Market Solutions, we’ll walk through what Rule 606 requires, the differences between 606(a) and 606(b), and how modern solutions like RSMS for SEC 606 reporting can simplify the process.
What Is SEC Rule 606(a)?
At its heart, SEC Rule 606(a) is about public transparency. It requires broker-dealers that route equity and option orders on behalf of customers to prepare quarterly reports disclosing detailed information about their order routing practices for non-directed orders in NMS stocks and NMS securities that are options contracts.
These reports are published in both PDF and XML formats for every calendar quarter. The process usually involves collecting massive amounts of data at the end of the quarter and publishing it shortly thereafter.
The goal? To give the public a clear view of where U.S. exchange-listed equity securities and options were routed for execution. It also requires firms to disclose the nature of any relationship they have with those venues, including payment for order flow. By fostering this type of competition, the SEC ensures the market remains fair for everyone.
What Is SEC Rule 606(b)?
While 606(a) is for the public, Rule 606(b) is personalized accountability. This section deals with customer-specific disclosures. If a customer comes to you and asks, “Where did my specific order go?”, Rule 606(b) mandates that you provide that answer.
Under 606(b)(1), broker-dealers must disclose to customers, upon request, the venues to which their individual orders were routed for execution. Furthermore, with the expansion of the rule, 606(b)(3) now requires much deeper disclosures for institutional customers regarding “held” and “not held” orders. This level of granular detail can be a logistical nightmare without the right SEC 606 compliance tools in place.
SEC Rule 606 Reporting Requirements (At a Glance)
If you’re looking for a quick checklist, here is what the SEC expects from your reporting:
- Quarterly Disclosure: Public reports must be easily accessible on a website.
- Format: Reports must be available in a machine-readable XML format and a human-readable PDF.
- Venue Relationships: You must disclose any financial inducements or profit-sharing agreements with execution venues.
- Customer Rights: Any customer has the right to request a written copy of the quarterly report via mail at no charge.
- Data Accuracy: The data must reflect a general overview of routing practices for NMS stocks and options.
How RSMS Simplifies SEC Rule 606 Reporting
RSMS is a cloud-based regtech platform that has earned the trust of broker-dealers. Built with seamless compliance workflows, integration and reliability at its core, RSMS makes 606 compliance easier, faster, and error-free.
By using RSMS for SEC 606 reporting, firms can move away from legacy tools and move toward a future of reporting reliability. It’s built to ensure your reporting is accurate, secure, and, most importantly, on time.
Why Broker-Dealers Choose RSMS
Why are so many firms making the switch? Because RSMS is designed to take the SEC 606 reporting weight off your shoulders so you can focus on bigger goals like growing your business and maintaining topline compliance posture.
Trusted, Secure Cloud-Hosted Platform: Your data is protected by industry-leading security protocols.
- OMS & EMS Integration: It integrates seamlessly with a wide range of Order Management and Execution Management Systems, pulling data automatically.
- On-Time Monitoring: No more last-minute scrambles at the end of the quarter; the system monitors operations on-time.
- Intelligent Data Management: It cleans, categorizes, and organizes your data for flawless reporting.
- Intuitive Interface: Built for teams, the interface is user-friendly, good for hassle-free SEC 606 reporting.
Full Coverage for All 606 Reporting Requirements
The regulatory landscape is always shifting, but RSMS stays ahead of the curve. Our regtech platform provides comprehensive support for every facet of the rule:
- SEC 606(a): Effortlessly generate the quarterly public reports that keep you in the clear with regulators.
- SEC 606(b): Respond to individual customer requests for order execution details in seconds.
- Integrated Workflows: From venue-reference data to customer-on-demand reports, everything is delivered with accuracy.
Trust RSMS for Seamless SEC Rule 606 Reporting
At the end of the day, SEC Rule 606 is about honesty and transparency in the markets. But we also know that the administrative burden of these requirements can be overwhelming for even the most seasoned compliance teams. We hope this guide helped you understand SEC Rule 606 reporting better.
Don’t let reporting requirements slow your momentum. By leveraging RSMS for SEC 606 reporting, you gain a regtech partner that is as invested in your compliance success as you are. Whether you are looking for better SEC 606 reporting tools or a complete overhaul of your CAT/CAIS regulatory workflow, RSMS has the solution.
Ready to see how easy 606 compliance can be?
Book a demo and let us show you how RSMS can transform your SEC Rule 606 reporting from a headache into a streamlined, automated success story.