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Order Handling and Best Execution Practices

Traders Magazine, December 2002

Bill Tanem

SEC Rule 11Ac1-5 and SEC Rule 11Ac1-6 were introduced to promote competition and disclosure in market making, order routing and order execution practices. The idea is to provide disclosure of trading practices to investors, to promote fairness and confidence in the securities markets. SEC Rule 11Ac1-5, or Rule 5 requires market centers to report their order execution quality on a monthly basis. These market centers are defined as OTC market makers that trade in National Market System securities. Reports must include:

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