Both SEC Rule 606 and FINRA Rule 6151 are pivotal regulations that aim to enhance transparency in the securities markets. SEC Rule 606 requires broker-dealers to disclose information about the routing of customer orders in equity securities and options. Specifically, it mandates quarterly reports detailing the venues to which customer orders are routed, along with the nature of the orders and any material aspects of their relationship with such venues, including any payment for order flow. Rule 606 requires Osaic to comply with four primary disclosure elements: 1) to make publicly available quarterly reports that present a general overview of order routing practices; 2) to disclose the nature of any relationship it has with venues that it routes client orders; 3) to furnish clients upon request the venues to which individual orders were sent for execution for the previous six months; and 4) to provide an annual written notification to clients that this information is available upon request.

FINRA Rule 6151 complements these requirements by focusing on the dissemination of specific order execution data, ensuring that investors receive timely and accurate information about how their orders are handled. These rules help to promote informed decision-making and fairness by providing investors with a clearer understanding of how their trades are executed and the potential conflicts of interest that might affect order routing decisions. Rule 6151 requires Osaic to comply with several key elements that include: 1) to make publicly available monthly reports detailing order execution quality; 2) disclose any material aspects of relationships with significant execution venues; 3) ensure reports are presented in a standardized format and be made available to the public in an easily accessible manner as specified by FINRA; and 4) ensure reports are updated and published in a timely manner while maintaining detailed records for a specified period.

With respect to Osaic’s relationships with trading venues, Osaic directs all trades in over-the-counter (OTC), listed stock, and options to either of our two clearing firms, Pershing LLC (“Pershing”) or National Financial Services, Inc. (“NFS”), for execution.

These clearing firms may receive compensation or other consideration (“payment for order flow”) for directing such orders to particular broker-dealers or market centers for execution. Payments for order flow may consist of any monetary or non-monetary compensation, remuneration, or consideration to the clearing firm in return for routing customer orders to a particular market or dealer. Payments may also include credits, rebates, or discounts against execution fees. The source and nature of compensation received in connection with a trade will be furnished to you upon your written request.