I am an individual investor. I would like to propose that, FINRA should expressly state that a member may not discriminate among customers with the same privileges and access placing substantially the same orders. This should include not assigning different probabilities or weights affecting routing destinations or other execution opportunities based on the customer’s identity, including the customer's history (such as the order history), the account's details (such as the cumulative fees, or P/L, or the number of orders already entered, filled, or cancelled, as of the time of the order) and economic relation to the firm, or any other customer-specific information that is unrelated to the characteristics or instructions of the order itself.
Put differently, so long as two orders have substantially equivalent characteristics for the purposes of execution, the identity or characteristics of the customer should not itself be an execution quality variable.
For example, whenever a broker does not transmit the originating customer’s identity, so that other market participants see only an order (from the broker) with the specified characteristics, the broker should not internally discriminate based on information about the originating customer that is unavailable to other market participants. A broker should also not, for example, predetermine or assign different routing probabilities for different customers in a manner that causes substantially similar orders from different customers to receive meaningfully different execution opportunities or execution quality.
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Anonymous Comment On Regulatory Notice 26-15
I am an individual investor. I would like to propose that, FINRA should expressly state that a member may not discriminate among customers with the same privileges and access placing substantially the same orders. This should include not assigning different probabilities or weights affecting routing destinations or other execution opportunities based on the customer’s identity, including the customer's history (such as the order history), the account's details (such as the cumulative fees, or P/L, or the number of orders already entered, filled, or cancelled, as of the time of the order) and economic relation to the firm, or any other customer-specific information that is unrelated to the characteristics or instructions of the order itself.
Put differently, so long as two orders have substantially equivalent characteristics for the purposes of execution, the identity or characteristics of the customer should not itself be an execution quality variable.
For example, whenever a broker does not transmit the originating customer’s identity, so that other market participants see only an order (from the broker) with the specified characteristics, the broker should not internally discriminate based on information about the originating customer that is unavailable to other market participants. A broker should also not, for example, predetermine or assign different routing probabilities for different customers in a manner that causes substantially similar orders from different customers to receive meaningfully different execution opportunities or execution quality.