Equity & Options Information & Reporting
Equity and Options Order Handling:
Ameriprise Financial allows clients and advisors to enter a variety of order types including market orders, limit orders and stop orders. When determining how best to handle an order, Ameriprise considers among other things; current market conditions including the security price, volatility, and relative liquidity (depth of market), size and type of transaction, accessibility of the quotation and any conditions or qualifiers of the order.
Ameriprise does not accept payment for order flow (PFOF) from our liquidity providers for any of our equity or option orders. These relationships with our liquidity providers are further detailed within our quarterly order routing reports, found below under the SEC Rule 606 and FINRA Rule 6151 sections.
Ameriprise does not make markets in any equity or option securities and does not participate in any pre-market or after-market trading.
Ameriprise Execution Quality:
Ameriprise routes orders to external execution venues to help obtain enhanced liquidity and execution pricing, as we target Price Improvement (PI) for our clients. Price improvement occurs when the execution price is greater than that of the bid (sells) or less than that of the ask (buys), which translates directly into client savings.
Ameriprise routinely analyzes order execution results and the quality associated with each execution venue. This analysis guides further routing decisions, utilizing benchmarks such as Effective Over Quoted Spread (EFQ), Speed and Fill Rates among others, to help provide our clients with quality executions.
Regulation & Reporting
SEC Rule 606:
SEC Rule 606(a) of Regulation NMS requires broker-dealers to publicly disclose information pertaining to their order routing practices of customer orders in NMS securities. These disclosures include material details regarding any relationships with execution venues in which the broker-dealer is routing order flow to. The SEC requires 606(a) reporting be published each quarter and be made available for free on a public website for at least three years.
Ameriprise Financial Services LLC. (AFS) does not route client orders. Order routing is exclusively handled by American Enterprise Investment Services Inc. (AEIS), the affiliated clearing firm for AFS. AFS does not receive payment for order flow from AEIS. AEIS does not route orders for other broker-dealers.
American Enterprise Investment Services Inc. (AEIS) uses the services of a third-party vendor to compile 606(a) reporting. These reports are available by accessing the following link: https://public.s3.com/rule606/hrbf/
FINRA 6151:
FINRA Rule 6151 (Disclosure of Order Routing Information for NMS Securities) requires members to submit to FINRA for centralized publication the order routing reports required under SEC Rule 606(a). FINRA 6151 took effect on June 30, 2024; requiring the centralized publication of 606(a) reporting starting with Q2 2024.
American Enterprise Investment Services Inc. (AEIS) 606(a) reporting can be accessed via FINRA’s centralized repository: NMS Equity and Option Order Routing Reports (SEC 606) | FINRA.org
Definitions:
Effective Spread- execution price compared to the midpoint of the NBBO multiplied by two.
Effective Over Quoted Spread (EFQ)- calculation that measures quality of an execution by comparing the execution prices to the quotes spread.
Fill Rate- percentage of shares (or orders) executed or filled
National Best Bid and Offer (NBBO)- highest bid and lowest ask pricing for a security across all exchanges.
Payment for Order Flow (PFOF)- compensation received by a routing firm for directing (routing) orders to a specific execution venue.
Quoted Spread- the difference between the National Bid and Offer at time of entry.
Regulation NMS- SEC rules aimed at modernizing and strengthening the US Equity markets by focusing on improved price executions, improved quote displays and a strengthened regulatory structure.