ICI Global Submits Comment Letter on IOSCO Consultation on Order Routing Incentives
ICI Global Trading & Markets Committee
Securities Operations Advisory Committee RE: ICI Global Submits Comment Letter on IOSCO Consultation on Order Routing Incentives
ICI Global has submitted a comment letter in response to a consultation report on order routing incentives issued by the International Organization of Securities Commissions (IOSCO).[1] The Consultation Report explains the types of incentives that might affect broker routing decisions in various jurisdictions and considers how different regulatory approaches affect these incentives.
The comment letter explains the importance of order routing decisions to funds and states that no jurisdiction has adopted sufficient disclosure requirements to enable funds to assess satisfactorily the order routing performance of broker-dealers or execution venues. The letter details the efforts of ICI and its members to improve transparency into order routing decisions in the United States and notes that IOSCO is the appropriate forum to facilitate a cross-border information exchange on these practices. The letter also supports enhancing understanding of non-execution services (e.g., research) that intermediaries may provide to their clients alongside execution services. We note, however, that any potential reforms, if found necessary, must provide a realistically workable framework for fund managers. The letter urges IOSCO to play a central role in encouraging jurisdictions to exchange information on routing incentives as conditions warrant.
Jennifer S. Choi
Associate General Counsel
George M. Gilbert
Counsel
endnotes
[1] Board, Report on Order Routing Incentives, Consultation Report, International Organization of Securities Commissions (December 2016), available at https://www.iosco.org/library/pubdocs/pdf/IOSCOPD551.pdf (Consultation Report).