If your broker dealer accepts equity orders or makes markets you should now have reports publicly available.

SEC Rule 11Ac1-5 (Market Makers)

If you are a market maker you are subject to the reporting requirements of this rule. We will not try to go into the details of the rule they are rather complex and if you believe you fall into one of the exemptions for inactively traded securities, small market centers, or block orders give us a call and we can review your case. The SEC has posted a "Staff Legal Bulletin" that reviews the requirements. Brokerage Consulting Services can assist you in complying on a one time basis or act as a service center to ensure ongoing compliance. Link to SEC document: www.sec.gov/interps/legal/slbim12a.htm

SEC Rule 11Ac1-6 (All Broker-Dealers that accept stock orders)

All Broker-Dealers must report on a quarterly basis their order handling procedures and must identify by name and percentage of orders where orders are routed.

The rules are detailed and compliance starts on July 2, 2001 with the first report due on by the end of October 2001. The reports must be publicly available, and you also must be able to supply individual order handling information to a client upon request. The SEC has posted "Legal Bulletin No. 13" and it covers the requirements in detail. Brokerage Consulting Services can also become a service center for the required reports and work with you to ensure that you are gathering the information required for the reports. Link to SEC document: www.sec.gov/interps/legal/mrslb13.htm

The NASD in NTM 01-44 gives guidance on both 11Ac1-5 & 6 they state " Rule 11Ac1-6 generally requires broker/dealers that route customer orders in covered securities to make publicly available quarterly reports that disclose venues to which they route non-directed orders. It also requires broker/ dealers to disclose the nature of any relationship they have with those venues, including any payment for order flow arrangements. In addition, broker/dealers must disclose to customers, on request, the venues to which their individual orders were routed." For the complete text of NASD NTM 01-44 click here.

About the only thing we can all be sure about the above rules is that during your next audit you will be tested for compliance. Don't wait till you are audited to ensure you comply with the reporting requirements call us today. If you are broker dealer that deals in stocks you have requirements under one or both of the above rules. Have you updated your procedures manual to indicate your procedures and the supervisor that is responsible for compliance with the new regulations? SEC regulations require that you have both written procedures and assigned responsibility for compliance with the procedures.