By Damon Grandbouche, Product Manager, Trillium Surveyor

The Shift

Rules 605 and 606 have been on the books since November 2000, giving investors and the market visibility into how broker-dealers route orders and how well those orders get executed.

For years, many firms treated these reports as administrative outputs. Compliance would spend time pulling data, a vendor would format it, someone would post it to the firm’s website, and the obligation was met until next quarter. The reports existed. Whether they were accurate was a question that, in practice, very few firms were systematically asking.

That’s changed. Regulators have made clear through examination guidance, risk alerts, and enforcement actions that reporting accuracy is no longer a secondary concern. The report itself has become a much more important supervisory and enforcement artifact.   

For broker-dealers still treating 606 as a quarterly compilation exercise, recent enforcement actions show why verification deserves closer attention. 

As of August 1, 2026, amended Rule 605 is live. It expands reporting requirements to large broker-dealers with 100,000 or more customer accounts and introduces more granular execution quality reporting.

FINRA also centralized all 606 reports on its website through Rule 6151 in June 2024. The reports are more visible, more comparable, and more scrutinized than at any point in their 26-year history.   

For firms producing 606 reports, that raises an important question: does what’s in the report actually match your trade data?

Producing the Report Isn’t the Same as Verifying It

The significance of that question goes beyond reporting accuracy. FINRA enforcement actions have paired Rule 606 reporting violations with findings related to the supervisory processes firms have in place to ensure those reports are complete and accurate.

When a firm publishes a 606 report with incorrect venue classifications, missing PFOF disclosures, or inaccurate order routing statistics, the reporting violation matters. Enforcement actions have also focused on whether the firm had a supervisory process designed to prevent or identify those errors.

FINRA Rule 3110 requires every member firm to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with applicable securities laws and regulations.

A firm may retain a third-party vendor to produce its 606 reports. But if its WSPs describe the process of compiling and publishing the report without procedures for verifying that the underlying data is complete and accurate, or reviewing the vendor’s output against the firm’s own transaction records before publication, errors can compound quarter after quarter.

In its October 2025 disciplinary actions, FINRA cited a firm that, across 11 quarterly 606 reports, misidentified three broker-dealers as execution venues. The firm’s WSPs didn’t require any comparison of draft report data against actual transaction records, and the firm conducted no review of the data it sent to its vendor.

The vendor produced what it was given, but the underlying data wasn’t independently verified. 

Common Reporting Mistakes Worth Checking

The enforcement record shows several recurring issues. Understanding how they happen is what makes the problem preventable.

1. Intermediary reported as venue. This can happen when reporting logic captures the broker-dealer a firm routes an order through rather than the venue where the order is ultimately executed. Once introduced, the same error can carry across multiple reports.
2. Order type misclassification. Orders can be categorized incorrectly if their terms aren’t evaluated against the prevailing quote at the time they’re received. The percentages may still add up correctly, making the error difficult to spot from the report alone.
3. Outdated material aspects. The narrative gets drafted when the reporting process is established, and nothing triggers a revisit when venue relationships or payment terms change. Nothing in the report looks wrong. It’s just describing an arrangement that no longer exists.
4. Incomplete order population. If the reporting system draws from a feed that captures only part of the firm’s order flow, the report can still look complete. The figures may appear reasonable even though some orders are missing from the underlying data.
5. The verification gap. A firm assumes the vendor is validating the data, while the vendor treats its role as producing the report from the data it receives. Neither is independently checking the final output against the firm’s transaction data.

None of these are detectable from the report alone. Each requires comparing published output against the firm’s underlying transaction data. That kind of verification is a key part of the supervisory process FINRA has emphasized, and its absence continues to appear in enforcement findings.

Why These Errors Are Becoming Easier to Find

Even if a firm’s reporting process hasn’t changed, the environment around it has.

The Consolidated Audit Trail gives regulators a detailed view of an order’s lifecycle, from origination and routing through execution or cancellation. 

At the same time, Rule 606(a) reports are now centralized on FINRA’s website in a standardized format, making them easier to access and compare.

Together, these changes provide greater visibility into both order activity and what firms are reporting. As reporting requirements become more granular, discrepancies can become easier to identify.

The Practical Takeaway

The firms that run into issues with 606 aren’t necessarily doing something wrong with their routing. They’re firms that may not be able to accurately verify and describe what they’re doing.

That’s a solvable problem. A few areas are worth a closer look:

Supervisory procedures need to go beyond compilation. If your WSPs describe how to produce and publish a 606 report but don’t describe how to verify the underlying data is accurate, there may be a gap. Procedures should require comparison of draft report data against transaction records, review of material aspect disclosures when routing relationships change, and a documented sign-off before publication.

Vendor verification needs to be a standing obligation. Outsourcing report production is standard practice and perfectly reasonable, as long as you’re verifying the output. The obligation to produce an accurate report doesn’t transfer with the production work. If your vendor is ingesting data you provide, someone at your firm needs to be checking what comes out on the other side.

The data behind the report needs to be accessible. Verification becomes much harder when teams have to pull, aggregate, and rebuild analysis every time they want to understand what’s driving the numbers. Firms need a practical way to review the underlying trade data and investigate potential issues before they carry into another reporting period.

Treating 606 reporting as a data quality discipline, supported by strong underlying data and supervisory processes, makes it easier to verify what gets published, investigate discrepancies, and maintain confidence in the report quarter after quarter.

If you’re taking a closer look at your 606 reporting process, we’re happy to share more about our findings and our approach within Surveyor’s Best Execution Analytics, including 606 reporting, instant visualizations, and analysis without the manual data prep. Schedule a brief chat here.