SEC Amendments May Launch New Execution Disclosure Era

On March 6, in a unanimous vote, the U.S. Securities and Exchange Commission adopted amendments to the disclosure requirements under Rule 605 of Regulation NMS for executions on covered orders in national market system stocks. The Rule 605 amendments seek to modernize and enhance execution quality reporting, and, among other things, (1) expand the scope of entities subject to Rule 605, (2) modify the categorization and content of order information required to be reported, and (3) require reporting entities to produce a summary report of execution quality. In this article, Sidley lawyers Charlie Sommers, Andrew Blake, and Michael Ogershok discuss the challenges facing entities impacted by these changes.