Series 24: SEC Rule 604 – Limit Order Display

SEC Rule 604 – Limit Order Display

The SEC requires market makers to immediately (within 30 seconds) display customer limit orders that are better than their current best quote for an NMS stock. This display must include the price and size of the order. For example, if a market maker displays a quote of 30.15 – 30.70, 7 x 5 and accepts a customer limit order to sell 200 shares at 30.60, the market maker must change its quote to 30.15 – 30.60, 7 x 2 within 30 seconds.

Some exceptions to the Limit Order Display Rule are:

• • If the customer’s limit order is 1