The Securities and Exchange Commission (“SEC”) requires all registered broker-dealers to disclose their policies regarding receipt of “payment for order flow”. The Commission defines “payment for order flow” as “any monetary payments, services, property, or other benefits that result in remuneration, compensation, or consideration to a broker or dealer from any broker or dealer, national securities exchange, registered securities association, or exchange member in return for the routing of customer orders by such broker or dealer to any broker or dealer, national securities exchange, registered securities association, or exchange member for execution, including but not limited to research, clearance, custody, products or services, reciprocal agreements for the provision of order flow adjustment of a broker or dealer’s unfavorable trading errors, effort to participate as underwriter in public offerings: stock loans or shared interest accrued thereon: discounts rebates, or any other reductions of or credits against any fee to, or expense or other financial obligation of, the broker or dealer routing a customer order that exceeds that fee, expense or other financial obligation”.
Lek Securities Corporation (“LSC”) generally does not negotiate payment for order flow, but the firm does receive rebates when adding (or removing) liquidity at certain market centers. When such remuneration is received, it is generally considered a reduction of execution cost and passed on to the customer in the form of reduced commissions. The source and amount such credits received will be disclosed upon request.
Lek Securities routes orders to different marketplaces in a manner consistent with its obligation to provide the best execution of all customer orders. Toward this end, when a customer does not specify a particular marketplace where an order should be executed, that order is routed to an exchange, market maker or ECN that matches or is deemed likely to improve the then-current national best bid or offer (NBBO) for the particular security. (See also: Lek Securities' Order Routing Policy)