Direct Answer
Direct answer: SEC Rule 606 (17 CFR § 242.606) requires broker-dealers to publish quarterly public reports showing the top execution venues where they routed non-directed customer orders, the volume directed to each venue, and the net payment for order flow (PFOF) or payment-to-order-flow revenue received per 100 shares. To read a 606 report: identify the order category (market orders, marketable limit orders, non-marketable limit orders), locate the PFOF column, compare the revenue-per-100-shares figure across brokers for the same category, and then cross-reference with Rule 605 execution-quality data to judge whether higher routing payments correspond to worse price improvement. The report answers where orders went and how much the broker was paid; it does not answer whether you received a good fill on any individual trade.
What this changes for a real user
Before Rule 606, a retail investor choosing between brokers had almost no regulated, standardized view of where their orders went or what financial relationships existed between their broker and the venues that executed those orders. The rule creates a documented, publicly accessible record every quarter. That record does three practical things for an informed user.
First, it allows a direct numerical comparison between brokers on a common metric: net payment received per 100 shares, broken down by order type. A broker earning $0.18 per 100 shares on market orders in a quarter is, by definition, being compensated differently for routing those orders than a broker earning $0.04 per 100 shares. The source of that compensation, payment for order flow from wholesalers, internalization profit, or exchange maker rebates, is also disclosed.
Second, it makes the conflict of interest legible rather than theoretical. A broker that routes a high proportion of retail market orders to a single wholesaler and earns substantial per-share payment from that wholesaler has a documented financial relationship with the venue executing those orders. Whether that relationship affects fill quality is a separate empirical question answered by Rule 605 execution reports, not by Rule 606 alone, but the conflict is now on record and quantified.
Third. It is a baseline, not a verdict. A user who reads a 606 report and concludes "this broker routes poorly" has overread the data. The report shows routing destinations and payment; it does not show price improvement, fill rates, or execution speed. Those dimensions are captured by SEC Rule 605 reports, which must be read alongside 606 data to form a complete picture.
Mechanics and definitions
Rule 606 in plain terms
Order-routing disclosure requirements trace back to Rule 11Ac1-6, adopted by the SEC in 2000 (effective 2001). When the SEC adopted Regulation NMS in 2005, this disclosure requirement was carried forward and renumbered as Rule 606. The rule was substantially amended in 2018, with the amended requirements phased in through September 2019 for larger broker-dealers (those handling more than 100,000 non-directed orders per month in NMS stocks) and later for smaller firms. The 2018 amendments added customer-specific reports on request (Rule 606(b)(3)) and required net payment figures rather than gross payment, making the economics more transparent.
Order categories disclosed
The aggregated public report (Rule 606(a)) breaks orders into four categories, each of which may route to different venues and generate different payment terms:
- Market orders, orders to buy or sell immediately at the best available price. Wholesalers typically pay the highest PFOF rates for these because they are most predictable and easiest to internalize profitably.
- Marketable limit orders, limit orders priced to execute immediately (buy limits at or above the ask; sell limits at or below the bid). Similar routing to market orders but with some limit-price protection.
- Non-marketable limit orders, limit orders that do not immediately execute and must rest on an order book or be routed to an exchange. These often generate lower PFOF or exchange rebates instead.
- Other orders, includes stop orders, conditional orders, and similar types.
Payment for order flow (PFOF) defined
Payment for order flow is compensation a broker receives from a market maker, wholesaler, or exchange for directing order flow to that venue. The Rule 606 report states the net payment per 100 shares, that is, gross PFOF received minus any payment the broker made to the venue (such as exchange access fees). A positive number means the broker received net compensation for routing to that venue; a negative number (rare for most retail order types) means the broker paid more in access fees than it received in rebates.
Key columns in the report
The structure of a public Rule 606(a) report includes these elements for each order category:
| Column / field | What it measures | What it does not measure |
|---|---|---|
| Execution venue name | The market center, wholesaler, or exchange receiving the orders | Whether that venue provided good price improvement |
| Proportion of non-directed orders routed (%) | Share of that order category sent to this venue | Whether those orders were appropriate candidates for that venue |
| Net payment received (per 100 shares) | Broker's net financial benefit from routing to this venue | Price improvement, fill rates, or speed of execution |
| Revenue from order flow (total, in dollars) | Aggregate dollar compensation received from all venues in the period | How that revenue compared with execution quality delivered |
606(b)(3) customer-specific reports
Since the 2019 amendments took effect, larger broker-dealers must provide a customer-specific 606(b)(3) report on request. This report shows where your orders, identified by account, were routed in the prior six months, along with the net payment attributable to those specific orders. Requesting this report gives a more direct view of your broker's routing decisions for your order mix rather than an aggregate across all customers. The right to request this report is available to customers of covered broker-dealers; verify with your specific broker whether and how to make the request.
Fact vs. interpretation
Fact: Rule 606 reports disclose documented routing venues and measured payment amounts. These are regulatory filings subject to SEC oversight and audited for accuracy. Interpretation: Whether higher PFOF payments indicate worse execution quality for the customer is a separate, empirical question. Academic research and SEC economic analyses have examined this relationship and reached mixed conclusions depending on market conditions, stock liquidity, and order size. The report itself does not answer the causation question; it provides the data that allows external analysis.
Worked example: comparing two brokers' 606 reports
Assumptions: Hypothetical broker data. Dollar amounts are illustrative and do not represent any actual broker's filings. All figures are per 100 shares. Quarter: Q1 2026.
Suppose a retail investor is deciding between Broker A and Broker B for placing frequent market orders in liquid large-cap equities. The investor downloads each broker's Rule 606(a) report for Q1 2026 and finds the following for the "market orders" category:
| Data point | Broker A | Broker B |
|---|---|---|
| Top execution venue | Wholesaler X (92% of market orders) | Wholesaler Y (61%), Exchange Z (28%), Wholesaler W (11%) |
| Net PFOF received (per 100 shares) | $0.22 | $0.07 |
| Total net payment received (quarter) | $3.4 million | $0.9 million |
What the comparison shows: Broker A routes nearly all market orders to a single wholesaler and earns roughly three times more per 100 shares in routing payment than Broker B. Broker B splits flow across more venues, including a regulated exchange, and earns substantially less per 100 shares.
What the comparison does not show: Neither report tells the investor whether the fills they received were at the NBBO, above it (price improvement), or below it (inferior execution). To answer that question. The investor must consult each broker's corresponding Rule 605 execution-quality report for the same quarter and same stock category. The 605 report will show metrics like average effective spread, price improvement rate, and fill speed, the dimensions that directly affect the investor's actual cost of trading.
Decision limit: A broker with lower PFOF figures is not automatically a better broker for execution quality. Some brokers with lower PFOF route more to exchanges where maker-taker fees apply; whether that produces better fills depends on specific market conditions. The correct analytical sequence is: read 606 to understand the routing and payment structure, then read 605 to evaluate whether that routing delivered competitive execution quality.
How to evaluate a Rule 606 report step by step
- Locate the broker's public 606 report. Larger broker-dealers post these on their websites (often under "Regulatory Disclosures," "Order Routing," or "SEC Filings"). The SEC does not maintain a central repository for all 606 reports, so you must find the broker's own posting. Reports are published within one month of each quarter's end.
- Identify the quarter and check the report date. Confirm the period covered. A Q1 report published in late April covers January, March. Compare the same quarter across brokers to avoid seasonality differences.
- Select the relevant order category. Market orders and marketable limit orders are the most commonly analyzed because they are the most likely to generate significant PFOF. If you primarily use limit orders that rest on books, focus on the non-marketable limit order section instead.
- Read the top-venue concentration. A single venue receiving 90%+ of a broker's orders in a category indicates high routing concentration. Note whether that venue is a wholesaler (likely PFOF relationship), a regulated exchange (likely maker-rebate relationship), or an ATS.
- Read the net payment per 100 shares. This is the core comparative figure. Higher positive values mean the broker is being compensated more for routing to that venue. This creates a documented financial incentive to route to that venue, whether it also produces an execution quality difference is determined from Rule 605 data.
- Request your individual 606(b)(3) report if available. If your broker is subject to the 2019 amendments, you can request a report specific to your account. This is more informative than the aggregate report because it reflects your actual order mix.
- Cross-reference with the Rule 605 execution-quality report. Find the matching 605 report (by venue or aggregate) and compare effective spread, price improvement, and fill rates for the same stock and order-size category. This is the step most retail investors skip, and the one that determines whether the routing structure in the 606 report translated into better or worse fills.
What can go wrong: failure modes
- Treating PFOF as a direct measure of harm. Higher PFOF received by a broker does not mechanically mean worse fills for customers. Some wholesalers compete intensely on price improvement to attract flow. The empirical question requires execution-quality data, not routing-payment data alone.
- Comparing 606 reports across different quarters. Market conditions, volatility regimes, and order mix can shift materially between quarters. A Q4 comparison against a Q1 report can reflect seasonal differences as much as broker policy differences.
- Ignoring the order-category breakdown. A broker may earn high PFOF on market orders but negligible amounts on non-marketable limit orders, or vice versa. Reading only the total figures without segmenting by order type produces a misleading aggregate.
- Assuming a single venue means a single counterparty. Large wholesalers operate across multiple trading desks and internalize differently depending on stock characteristics. Routing concentration to one named entity does not mean all of those trades execute identically.
- Treating aggregate data as individual-order information. Rule 606(a) reports are population-level statistics. Even if you trade with Broker A during the quarter covered, your specific orders may have routed differently from the aggregate. The 606(b)(3) individual report addresses this, but is not required for all broker-dealers and must be requested.
- Reading the dollar total rather than per-100-shares figures. A large broker routing 500 million orders will show a large absolute payment total even at a low per-share rate. The per-100-shares figure is the normalizing metric that enables apples-to-apples comparison.
- Skipping the 605 cross-reference entirely. Rule 606 without Rule 605 is an incomplete analysis. Users who draw execution-quality conclusions from routing data alone, without examining price improvement rates and effective spreads, are using an incomplete signal.
Risk, limitations, and when not to rely on Rule 606
What Rule 606 does not disclose
The report does not capture execution quality on individual trades, spread capture, fill rates, partial fills, latency, or the price at which your specific order filled relative to the NBBO at the time of execution. It does not tell you whether your broker's order routing algorithm sent your order to a venue that was disadvantageous for your specific order characteristics (size, tick sensitivity, time of day). For those questions, Rule 605 data and broker-provided trade confirmation data are the appropriate sources.
Directed orders are excluded
Rule 606 covers non-directed orders, orders where the customer did not instruct the broker where to route. If your broker offers a "directed order" feature and you specify a venue, that order is outside the 606 disclosure scope. Institutional investors who use directed orders may have a substantially different experience from what the public 606 aggregate describes for retail flow.
Rule changes and report format evolution
Rule 606 has been amended before and could be amended again. The SEC has periodically reviewed PFOF disclosure requirements and related market structure rules. Any analysis of 606 data should note the regulatory period covered, since changes to required fields, calculation methodology, or coverage thresholds can make pre- and post-amendment comparisons unreliable. Verify current rule requirements against the SEC staff responses to frequently asked questions concerning Rule 606 of Regulation NMS before relying on a historical description.
When the analysis is most useful
Rule 606 analysis is most informative when: (a) you are comparing the same broker across multiple quarters to detect routing changes; (b) you are selecting a broker before opening an account and want a documented baseline on routing economics; or (c) you are writing a formal analysis for an institutional or regulatory purpose and need sourced, regulated data. It is least informative for evaluating the quality of a single trade or a short-term sequence of trades, where the individual 606(b)(3) report supplemented by trade confirmation data and Rule 605 benchmarks provides better evidence.
How this connects to Orders, Routing & Fill Quality
Rule 606 is one of two primary regulated disclosure frameworks inside Orders, Routing & Fill Quality. The other is Rule 605, which requires execution venues (not brokers) to report execution quality statistics for covered orders. Together, these rules create a pair of complementary data sources: 606 explains the routing structure and the financial incentives, while 605 provides evidence on whether that structure produced competitive execution.
Understanding 606 also requires a working knowledge of the concepts in the broader Market Structure & Trade Execution hub. Payment for order flow makes sense only in the context of how retail orders interact with wholesaler internalization, how the NBBO is set, and what price improvement means as a regulated concept. The prerequisite for this page is a basic understanding of odd lots, round lots, and how quote visibility works, covered in Odd Lots, Round Lots, and Quote Visibility. The natural next step is understanding what mistakes traders make when relying on routing and fill data, covered in Common Order-Routing and Fill-Quality Mistakes.
For traders who use stock trading strategies with high frequency or tight execution constraints, order routing economics are not theoretical. A strategy that appears edge-generating in backtests can have its net expectancy materially changed by routing-related execution differences that are disclosed, but only partially, in Rule 606 data. Similar considerations apply to options strategies that depend on tight bid-ask execution and to futures and perpetuals where venue-routing economics differ structurally from equity markets.
The Execution Cost Calculator on Swoopr Investment lets you estimate how routing-related cost differences (expressed as per-share basis points) compound over a series of trades, giving the 606 per-100-shares figures a direct translation into strategy-level cost impact.
Checklist: reading a Rule 606 report
- Confirm the report is from the correct broker and the correct quarter before making any comparisons.
- Identify which order categories apply to your trading style (market orders, marketable limits, or non-marketable limits) and read those sections specifically, not only the aggregate summary.
- Record the net payment per 100 shares for the relevant category. This is the primary normalizing figure for cross-broker comparison.
- Note the top-venue concentration percentage. If a single venue receives 80%+ of a category, flag that as high routing concentration and investigate that venue's execution quality separately via its Rule 605 report.
- Check whether the compensation structure involves PFOF from wholesalers, exchange maker rebates, or both, these create different economic incentives and differ in regulatory treatment in various jurisdictions.
- Request your individual 606(b)(3) report if you are a customer of a covered broker-dealer and if your account has meaningful order activity in the relevant period.
- Match the 606 analysis to the corresponding Rule 605 execution-quality data before drawing conclusions about whether routing economics affected fill quality.
- Note the regulatory period and confirm the report was prepared under the current version of Rule 606 (post-2019 amendments) before comparing with older data.
Treating a Routing Report as a Question Generator
A routing disclosure is best used to produce questions rather than verdicts. It shows where flow went and what was received in return. It does not show what your own orders received, which is the thing you actually want to know. The right response to a surprising concentration or payment figure is to look next at execution quality statistics, not to reach a conclusion from the routing report alone.
The most common error is arithmetic performed on the wrong denominator. Payments are reported per hundred shares across a category of orders, and converting that into a cost supposedly borne by one particular trade requires assumptions the report does not supply. The figure describes a business arrangement rather than a per-order charge.
There is a coverage limit as well. These reports address non-directed orders in defined categories, so activity falling outside those categories is simply not described. An order type you use heavily can be absent from the picture entirely.
Disclosure requirements are revised over time. Before comparing two reports, confirm they were prepared under the same rules, because a change in what must be reported looks very much like a change in behaviour.
Frequently asked questions
Where do I find a broker's Rule 606 report?
Most regulated broker-dealers publish their Rule 606 reports on their own websites, typically under a section labeled "Regulatory Disclosures," "Order Routing Disclosures," or "SEC Filings." Search your broker's site for "Rule 606" or "order routing report." Reports are due within one month of each calendar quarter's end (by the end of January, April, July, and October). The SEC does not maintain a central repository for all broker 606 reports, so you must locate each broker's report independently.
What is the difference between Rule 606 and Rule 605?
Rule 606 applies to broker-dealers and discloses where they route orders and how much they are paid for routing. Rule 605 applies to execution venues (market centers) and discloses execution quality statistics, effective spreads, price improvement rates, fill speeds, for covered orders they receive. The two rules are complementary: Rule 606 explains the routing structure and its economics; Rule 605 provides evidence on whether that routing produced good execution. A complete analysis uses both. Reading only one gives an incomplete picture of broker execution economics.
Does higher payment for order flow mean worse execution for me?
Not necessarily, and not directly from the Rule 606 data alone. PFOF creates a documented financial incentive for the broker to route to the paying venue, but whether that incentive translated into inferior fills is an empirical question answered by Rule 605 execution data, not by the routing report itself. Academic research has found mixed results: in some market conditions and for some order types, wholesalers receiving high PFOF also provided price improvement above the NBBO midpoint; in others, effective spreads were wider than exchange-routed alternatives. You must examine both reports together and compare effective spread and price improvement data to assess whether routing economics affected your fill quality.
Can I request a report specific to my own orders?
Yes, if your broker-dealer is subject to the 2019 Rule 606(b)(3) amendment. Broker-dealers handling more than 100,000 non-directed orders per month in NMS stocks are required to provide a customer-specific report on request, covering your account's order routing for the prior six months. This report is more informative than the aggregate public report because it reflects your actual order mix rather than all customers combined. Contact your broker's compliance or customer service department to make the request. Not all broker-dealers are covered by this requirement, smaller firms may be exempt. Verify with your specific broker.
Do Rule 606 requirements apply to options orders?
Yes, with some differences. Rule 606(a) covers non-directed orders in NMS securities, which includes listed options as well as equities. However, the options market structure is different: options route to exchanges under a competing-exchange model rather than to wholesale market makers in the same way as equities, and PFOF economics differ. The disclosure fields in the 606 report are the same in structure, but the payment figures and venue concentrations will reflect options-specific routing arrangements. Check the options-specific sections of your broker's report separately from the equities sections.
What does "non-directed order" mean in the Rule 606 context?
A non-directed order is one where the customer did not instruct the broker-dealer to route it to a specific venue. When a retail investor places a standard market or limit order through their brokerage app without specifying a destination. That is a non-directed order and is subject to the Rule 606 disclosure framework. By contrast, if a customer explicitly routes an order to a specific exchange or market maker, known as a directed order, that trade is outside Rule 606's scope. Institutional investors frequently use directed orders; most retail investors place non-directed orders and are therefore directly covered by the Rule 606 disclosure regime.
How often do brokers update their Rule 606 reports?
Rule 606 reports are quarterly. Each report covers a calendar quarter (January, March, April, June, July, September, October, December) and must be published within one month after the quarter ends. A Q1 report is therefore available by the end of April; a Q2 report by the end of July. For more frequent monitoring of routing behavior, the customer-specific 606(b)(3) report covers a rolling six-month lookback and can be requested at any time, subject to your broker's processing procedures.
Can I use Rule 606 data to evaluate a single trade I placed?
No. Rule 606 reports are aggregated statistics across all non-directed orders routed by the broker during the quarter. They describe population-level routing patterns and average payment figures, not the routing or fill outcome of any individual order. To investigate a specific trade, use your broker's trade confirmation, the time-and-sales data for the stock at the time of execution, and the applicable Rule 605 statistics for the venue that received the order. The customer-specific 606(b)(3) report narrows the scope to your account but still does not provide single-trade routing data.
What can be inferred from a change in a broker's routing mix between quarters?
A shift in destination shares indicates the broker changed its arrangements, its routing logic, or that order flow characteristics changed. The report shows the outcome without the reason. Comparing successive quarters is more informative than reading one in isolation, because the direction of change is visible even when the absolute figures are hard to interpret, and a large shift is a question worth putting to the firm rather than a conclusion.
References
Assumptions: All worked examples use hypothetical, illustrative figures. No actual broker data was used. Regulatory rule citations refer to Rule 606 as amended effective September 2019. Rule coverage thresholds and amendment timelines are as published by the SEC; verify current requirements at SEC.gov before relying on this summary for compliance or legal purposes.
- 17 CFR § 242.606: Rule 606 full text (eCFR): primary source for rule requirements.
- SEC Release No. 34-84528: 2018 Rule 606 Amendments: the rule revision that added net payment disclosure and 606(b)(3) customer-specific reports.
- SEC: Frequently Asked Questions on Rule 605: for cross-referencing execution quality disclosures with Rule 606 routing data.
- FINRA: Payment for Order Flow (Investor Insights): regulatory context on PFOF from FINRA's investor education perspective.
- SEC: Trading Basics Investor Bulletin: SEC's retail investor education on order routing and market structure.
Next lesson
Next lesson: Common Order-Routing and Fill-Quality Mistakes: the practical error patterns that follow from misreading routing data, including overweighting PFOF figures without execution-quality context, treating stop orders as guaranteed fills, and misinterpreting partial fills.
Prerequisite: Odd Lots, Round Lots, and Quote Visibility: how lot-size classification affects which quotes are protected under Regulation NMS and therefore which fills are subject to best-execution requirements.
Educational disclaimer
For education only; not personalized investment, tax, or legal advice. Trading can result in substantial losses.
Broker rules, SEC regulations, exchange mechanics, PFOF arrangements, and other market requirements can change. The description of Rule 606 on this page reflects requirements as of August 2026. Verify current requirements at SEC.gov and with your broker before acting or relying on this content for compliance purposes.