Securities and Exchange Commission 2024 – Federal Register Recent Federal Regulation Documents

The Securities and Exchange Commission ("Commission" or "SEC") is adopting amendments to a rule under the Securities Exchange Act of 1934 ("Exchange Act") that requires disclosures for order executions in national market system ("NMS") stocks. First, the amendments expand the scope of reporting entities subject to the preexisting rule that requires market centers to make available to the public monthly execution quality reports to encompass broker-dealers with a larger number of customers. Next, the amendments modify the definition of "covered order" to include certain orders submitted outside of regular trading hours and certain orders submitted with stop prices. In addition, the amendments modify the information required to be reported under the rule, including changing how orders are categorized by order size as well as how they are categorized by order type. The amendments, as part of the changes to the order size categories, modify the rule to capture execution quality information for fractional share orders, odd-lot orders, and larger-sized orders. Additionally, the amendments modify reporting requirements for non- marketable limit orders ("NMLOs") in order to capture more relevant execution quality information for these orders by requiring statistics to be reported from the time such orders become executable. The amendments modify time-to-execution categories and require average time to execution to be measured in increments of a millisecond or finer and calculated on a share-weighted basis for all orders. The amendments require that the time of order receipt and time of order execution be measured in increments of a millisecond or finer, and that realized spread be calculated at multiple time intervals. Finally, the amendments enhance the accessibility of the reported execution quality statistics by requiring all reporting entities to make a summary report available.

The Securities and Exchange Commission ("SEC" or "Commission") is adopting amendments to the rule under the Investment Advisers Act of 1940 that exempts certain investment advisers that provide advisory services through the internet ("internet investment advisers") from the prohibition on Commission registration, as well as related amendments to Form ADV. The amendments are designed to modernize the rule's conditions to account for the evolution in technology and the investment advisory industry since the initial adoption of the rule in 2002.

The Securities and Exchange Commission ("Commission") is adopting technical amendments to various rules and forms under the Securities Exchange Act of 1934 ("Exchange Act") and the Investment Company Act of 1940 ("Investment Company Act") to reflect a Federal court's vacatur of rule amendments that the Commission adopted on May 3, 2023, to modernize and improve disclosure about repurchases of an issuer's equity securities that are registered under the Exchange Act ("Repurchase Rule"). The court's vacatur of the Repurchase Rule was effective as of December 19, 2023, and had the legal effect of reverting to the rules and forms that existed prior to the effective date of the Repurchase Rule. These technical amendments revise the Code of Federal Regulations ("CFR") to reflect the court's vacatur of the Repurchase Rule.