SEC Rule 606

Quarterly Order Routing Report

Morgan Stanley Smith Barney LLC (Morgan Stanley) is required by the Securities and Exchange Commission (SEC) to disclose information with respect to payment for order flow. According to the SEC, payment for order flow includes monetary payment, reciprocal agreements, services, property, or any other benefit that results in remuneration, compensation, or consideration to a broker-dealer in return for routing of customer order flow and includes exchange rebates and credits.

Morgan Stanley receives payment for order flow from particular market centers for Self-Directed, E*TRADE from Morgan Stanley (E*TRADE) customer orders in National Market System (NMS) Securities (i.e., exchange-listed stocks and ETFs and standardized options) and over-the-counter (OTC) securities that Morgan Stanley directs to and are executed at such market centers. Morgan Stanley is compensated through its receipt of payment for order flow and will furnish upon written request the source and amount of any such compensation it received in connection with a particular transaction.  In accordance with SEC Rule 606, Morgan Stanley publishes a quarterly report detailing the material market centers to which it routes orders in NMS Securities and its material relationships with those market centers.

Morgan Stanley’s order routing practices are subject to Morgan Stanley’s best execution obligations. Morgan Stanley maintains policies and procedures to review the quality of executions it receives from market centers to which it routes orders and, notwithstanding its receipt of payment for order flow, Morgan Stanley seeks to route customer orders consistent with its best execution obligations and the results of such reviews.

Starting in Q4 2022, Morgan Stanley began transitioning existing clients from its affiliated broker-dealer, E*TRADE Securities LLC. Advanced notice of clients' transition date along with detailed information regarding the transition was provided to clients.

Historical Quarterly Order Routing Reports reflecting order routing and execution statistics for both E*TRADE Securities LLC and Morgan Stanley client orders are provided below. Learn more about Morgan Stanley’s order routing practices.