Finding Your Broker's Rule 606 Report
SEC Rule 606 requires brokers to publish quarterly reports disclosing their order routing practices and PFOF received. To find your broker's report: visit your broker's website and search for 'Rule 606' or 'order routing disclosures.' Many brokers link these in their legal/compliance or investor disclosures section. The reports disclose PFOF amounts received per order type and the market centers where orders were routed.
Interpreting the 606 Report
Rule 606 reports show which market makers received your broker's order flow (Citadel Securities, Virtu, G1 Execution Services, etc.) and what PFOF was paid. Higher PFOF payments to the broker from a market maker may indicate that the market maker is paying more for order flow — which can correlate with less-favorable execution quality. Comparing execution quality statistics (Rule 605 reports) alongside 606 reports gives a more complete picture.
Questions to Ask Your Broker
Investors can ask brokers directly: Do you receive PFOF? Which market makers do you route to? How do you determine that these routing arrangements provide best execution? Brokers are required to have policies on best execution and to be able to explain their routing decisions. A broker that cannot articulate how its routing serves clients' best interests may warrant closer scrutiny.
Practical Steps for Concerned Investors
Investors who want to minimize PFOF impacts can: use limit orders rather than market orders; consider brokers that offer direct routing; request that their broker route orders to exchanges; or choose brokers with documented better-than-average execution quality statistics. IEX and direct-routing options at some brokers provide PFOF-free routing alternatives.