IOSCO released a report on order routing incentives.
IOSCO surveyed member regulators and intermediaries concerning the impact of current and proposed regulations for order routing incentives. The report focused on three principal types of incentives:
- monetary incentives provided by execution venues to brokers sending customer orders; e.g., rebates and payment for order flow;
- internalization; and
- the bundling of services, including research; e.g., soft dollars.
As a result of ongoing regulatory measures, the report does not propose any further next steps, but will continue to monitor implementation of the regulatory reforms.
Commentary / Steven Lofchie
The IOSCO report is useful insofar as it provides an overview, and some guidance, as to the direction of regulators in various jurisdictions around the world. The report may be particularly useful to firms looking to stay on top of, or ahead of, regulatory developments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
