SEC Grants Exemptions for Enhanced Stock Execution Reports
Published Date: 4/6/2026
Notice
Summary
The SEC is giving some market players a bit of extra time and special permission to meet new rules about sharing monthly reports on stock trade quality. Big broker-dealers and trading platforms will now have to share clearer, more detailed info starting August 1, 2026, helping everyone see how well trades are executed. These changes aim to make the stock market fairer and more transparent without causing money headaches for the companies involved.
Analyzed Economic Effects
6 provisions identified: 5 benefits, 1 costs, 0 mixed.
Monthly Rule 605 Reports Required
Market centers and larger broker-dealers must make public monthly detailed and summary execution-quality reports for covered orders in NMS stocks. A broker-dealer meets the customer account threshold for reporting if it introduces or carries 100,000 or more customer accounts; the Rule 605 amendments' compliance date was set as August 1, 2026.
Fractional-Share Reporting Exemption
Customer-facing broker-dealers that execute fractional-share orders only when a customer is exiting fractional positions from (1) a dividend reinvestment program or (2) a stock dividend with a fractional component are exempted from producing separate Rule 605 reports for their market center function. Such broker-dealers would still need to produce Rule 605 reports for their broker-dealer function if they meet the customer-account threshold.
Trading-Halt Reporting Rules Changed
The Commission rescinds the old trading-halt exemption and replaces it with rules that: (1) exclude market orders and marketable order types received during an announced trading halt from Rule 605 reports; (2) treat many non-marketable order types based on the time they become executable rather than time of receipt; and (3) apply a five-minute rule for orders received or becoming executable shortly before a halt. For executions less than five minutes before a halt, average realized spread should use the last NBBO disseminated before the halt.
Inactively Traded Securities Exemption Expanded
The exemption for very inactively traded securities is supplemented to explicitly include broker-dealers as reporting entities. The exemption covers any NMS stock that averaged no more than five reported transactions per trading day for each of the preceding six months (or the shorter period since designation as an NMS stock).
Manual-Order Reporting Exemption Rescinded
The Commission rescinds the temporary exemption that excluded manually-received orders from Rule 605 reporting; market centers and broker-dealers must now include manually-received orders in Rule 605 reports, because automated systems now capture nearly all orders.
Crossed-NBBO Order Exemption and Procedure
All orders that would require reference to an NBBO that has been crossed for 30 seconds or more are exempted from Rule 605 and must be excluded from reports. Reporting entities should use the NBBO if quotes are not crossed or locked, use the next-in-time uncrossed NBBO if less than 30 seconds separate uncrossed NBBOs, and exclude affected orders entirely if 30 seconds or more separate uncrossed NBBOs.
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