Sec. 2. Studies and reports
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/bill/117/hr/4617/ih/section-2·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Securities and Exchange Commission shall carry out a study on payment for order flow received by brokerage firms for routing customer orders to market centers, including wholesale brokerages, alternative trading systems, internalizers, and exchanges, including— payment for order flow arrangements; conflicts arising from these payment arrangements; the extent to which execution prices for brokerage firm customers are reflective of the best available market price; the impact of payment for order flow arrangements on customer trade execution quality; steps firms are taking to mitigate or eliminate conflicts stemming from these arrangements; how brokerage firms disclose payment for order flow to customers; whether customers understand the disclosures provided by brokerage firms regarding payment for order flow; the disclosure requirements pursuant to Rule 606 of Regulation NMS (17 C.F.R. 242.606); whether firms are adequately disclosing payment for order flow on Form CRS; steps brokerage firms are taking, if any, to limit how market centers use the brokerage firms’ customer’s data; and the extent to which brokers are surveying different market centers for best prices prior to routing specific customer orders.
Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Commission shall issue a report to the Congress containing all findings and determinations made in carrying out the study required under subsection (a). Not later than 18 months after the date of enactment of this Act, the Securities and Exchange Commission shall issue rules, subject to notice and comment, to revise its rules consistent with the results of such study, including, if warranted, to prohibit or limit the payment for order flow.
The Commission may issue rules to regulate, limit, or prohibit the payment for order flow before the completion of the study required under this section, if the Commission finds such a rule is necessary or appropriate in the public interest or for the protection of investors.
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Sec. 2
Studies and reports
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