Order Routing Rule 606 Disclosure
The Formal Definition
A mandatory US Securities and Exchange Commission (SEC) quarterly disclosure requiring broker-dealers to publicly report where they route non-directed customer orders, detailing the specific routing venues and the exact net payment for order flow (PFOF) received per share or contract.
Rule 606 Metric: Total Net PFOF Received ($) / Total Routed Share Volume = Net Kickback per Share (Cents per Share)
Cole Barrett's Reality Check
The Unvarnished Bottom Line"Rule 606 reports are where brokers reveal who actually pays their bills. If you want to know if your '$0 commission' broker is selling your orders, look up their SEC Rule 606 disclosure. It lists the wholesale market makers they send your trades to and the exact millions of dollars they collect each quarter in payment for order flow."
Interactive Simulator: Test the Math
Real-World Example: Scenario Breakdown
Examining the real numbers for: Auditing a retail broker's order routing incentives across 10,000,000 shares of retail equity order flow
| Execution Metric | Direct Lit Router (Zero PFOF Accepted) | Wholesale Monetizer (PFOF Reliant) |
|---|---|---|
| Fee / Rate | $0.005 per share | $0.00 'free' |
| Spread / Buffer | Rule 606 reveals 95% of orders routed to lit exchanges (NYSE, Nasdaq, IEX) | Rule 606 reveals 98% of non-directed orders routed to internalizers |
| Execution / Status | Net PFOF collected: $0.00; maximum price improvement captured | Collected $0.0020 per share in wholesale market-maker kickbacks |
| Total Cost / Result | Transparent, unconflicted agency routing | Customer trades treated as a product sold to wholesale market makers |
How Brokers Weaponize This Term
Brokerages bury their quarterly Rule 606 disclosures in obscure legal footer links using unformatted PDF tables, making it difficult for retail clients to see how their orders are monetized.
Broker Evaluation Matrix
Cole Approves
Interactive Brokers: Publishes detailed, audited Rule 606 disclosures and offers IBKR Pro accounts that route orders independently of PFOF kickbacks.
Read Audit →Cole Flags / Avoids
PFOF-Driven Retail Apps: Routes nearly 100% of customer orders to high-paying wholesale internalizers according to quarterly Rule 606 filings.
View Trap Details →Frequently Asked Questions
What is the difference between Rule 605 and Rule 606?
Rule 605 requires market centers to disclose execution quality (like effective spreads and price improvement); Rule 606 requires brokers to disclose where they route orders and the PFOF payments received.
Can retail investors request custom routing disclosures for their own trades?
Yes. Under SEC Rule 606(b), a customer has the legal right to request the specific venue and execution timing for all of their orders over the previous six months.