In approximately five months, US-based broker-dealers will need to issue new and more detailed versions of their Rule 606 order-routing reports, which has them looking to the Securities and Exchange Commission for guidance.

The new rule, which goes into effect May 20, 2019, broadens the number of order types covered while providing greater details for broker-dealer clients.

Firms still will need to file their reports quarterly, but each report will need to be broken down into calendar months. Broker-dealers also will have to report based on the security type rather than by exchange, noted Son-Mi Lee, a representative of the Financial Information Forum during a recent open call hosted by the Security Traders Association.

The reports will need to include those NMS securities that part of the S&P 500, other securities as well as options contracts in NMS securities.

“Of these, each section should include the total percentage of orders that were non-directed and, of those, the total percentage of market orders, limit orders, and other orders should be provided,” she said. “The new requirement is that marketable limit orders need to be provided as well. Those two categories are not in the current Rule 606.”

Each report will need to include the top 10 exchanges with the highest percentage in non-directed order as well as those receiving more than 5 percent of the non-directed orders. Firms will need to provide the percentage of market orders, limit orders, and other orders; the percentage of limit orders and non-marketable limit orders; and the total dollar amount for payment for order flow received from each venue.

At a clients request, firms also will need to provide the past six months of order-routing data unless the firm holds less than 5 percent of its total NMS-share orders received. However, if a firm crosses the 5-percent threshold, then it will need to provide the information within the next four calendar months after it passed the threshold.

“If they go back under the 5-percent threshold, they do not have to provide it,” said Lee. “If they cross it again, they have to start providing it again within the next calendar month if they had been required to provide it previously.”

Firms are exempt from providing routing data to clients who have not provided order flow in the past six months and whose orders have notional values of less than $1 million.

The Commission acknowledged that having the rule go into effect mid-month in the middle of a quarter would is a bit awkward and that it might change the start date of the quarterly reporting.

“We are going think about that one and take it back here, and maybe we can provide some guidance that the third-quarter start would be appropriate,” said Ted Venuti, assistant director, Division of Trading & Markets at the SEC, during the call. “I still think we need to think about that a little bit.”

If the Commission receives enough requests for guidance in implementing the new rule, it would consider developing a written FAQ, according to John Roeser, associate director, Division of Trading & Markets at the SEC and who also was on the call.