SEC Rule 605 Execution Reports: What Just Changed for Brokers
Execution Quality Reporting Gets a Major Upgrade
Today marks an important shift in how execution quality is measured and disclosed. The SEC amendments expand the scope of reporting entities subject to the preexisting rule that requires market centers to make available to the public monthly execution quality reports to encompass broker-dealers with a larger number of customers. Specifically, the scope now includes broker-dealers that introduce or carry 100,000 or more customer accounts.
This is the first time in SEC Rule 605's history that larger broker-dealers—not just exchanges and alternative trading systems—must publicly disclose how well they execute customer orders.
What's Actually Changing?
The SEC has adopted updates to Rule 605 to modernize transparency and help investors, and industry participants assess execution quality across brokers. The amendments introduce three key changes:
Broader scope of covered orders. The definition of "covered order" is expanded to include certain orders submitted outside of regular trading hours, certain orders submitted with stop prices, and nonexempt short sale orders.
More precise timing measurements. The amendments modify time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and calculated on a share-weighted basis for all orders. This granularity helps identify even small execution delays.
New summary reports. The amendments enhance the accessibility of the reported execution quality statistics by requiring all reporting entities to make a summary report available. This makes the data easier for retail investors to digest alongside the detailed technical reports.
Why This Matters for Investors
Public reporting and voluntary disclosures historically improved execution quality and reduced disparities across brokers. By including larger broker-dealers in the reporting requirement, the SEC is extending that pressure for better performance to platforms serving a growing segment of the retail market.
These reports show critical metrics like price improvement (how often orders fill better than the displayed price), effective spreads, and execution speed. When platforms know their execution quality will be compared publicly, the competitive incentive to improve tends to sharpen.
What Happens Next
The first monthly reports under the amended rule, covering August 2026, must be published before the end of September. Reports are published individually by each platform on their own websites—there's no central SEC repository—so you'll need to visit a platform's website directly to review its disclosures.
Analysis, not investment advice.