Series 55

AAA

Commissions And Trade Complaints - Protection Of Customer Orders

Customer orders are required to be protected by the firm at the price that is reportable to ACT. For example, if a customer placed an order to purchase 1000 shares of GHJK at 10.00 the firm would protect the customer’s order at 10 and add the commission or mark up to the price when the order is executed. However, if the customer gives the firm a net price order that includes mark ups/downs or commissions, the firm must protect the order at a price that takes into consideration all fees to be charged to the customer. For example if a customer enters an order to purchase 1000 shares of GHJK at 10.50 net and the firm is going to charge a 25 cent mark up, the firm must protect the customer’s purchase order at 10.25, which is the price that will be reported to ACT. If the firm did not disclose to the customer that it was working the order for a 25 cent credit the firm must protect the customer’s order at the net price of 10.50 and report an execution of the order to ACT at 10.50.

Firm Quote Rule
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