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Order Routing

In arranging for the execution of Non-Directed Orders for equities and listed options, Schwab seeks out industry-leading execution services and access to the best-performing markets.  Schwab routes orders for execution to UBS Securities LLC (“UBS”) and other broker-dealers, who may act as market maker or manage execution of the orders in other market venues. 

Schwab considers a number of factors in evaluating execution quality among markets and firms, including execution price and opportunities for price improvement, market depth and order size, the trading characteristics of the security, speed and accuracy of executions, the availability of efficient and reliable order handling systems, liquidity and automatic execution guarantees, and service levels and the cost of executing orders at a particular market or firm. Price improvement occurs when an order is executed at a price more favorable than the displayed national best bid or offer. Schwab regularly monitors the execution quality obtained to ensure orders are routed to market venues that have provided high-quality executions over time. 

Quarterly information regarding the markets and firms to which we route orders, and remuneration received, is provided below. Information regarding the routing destination and time of execution of your orders for up to a six-month period is also available.

Report on Routing Customer Orders for Quarter Ending March 31, 2016

The report is divided into four sections:

Securities Listed on the New York Stock Exchange ("NYSE") and Reported as a Network A Eligible Security
Securities Listed on the NYSE Amex or Regional Exchanges and Reported as a Network B Eligible Security
Securities Listed on the NASDAQ Stock Market ("NASDAQ")
Exchange-Listed Options

For each section, this report identifies the principal venues to which Schwab routes non-directed orders, sets forth the percentage of various types of orders routed to each of the venues, and discusses the material aspects of any arrangements Schwab may have with these venues

.

I. Securities Listed on the NYSE/Network A Eligible Securities

Summary Statistics NYSE
Non-directed orders as percentage (%) of total customer orders: 98.4%
1. Market Orders as % of total non-directed orders 51.3%
2. Limit Orders as % of total non-directed orders 44.4%
3. Other Orders as % of total non-directed orders 4.3%
Venues Receiving Significant % of Total Non-Directed Orders
Venue % of Non-Directed Order Flow Received  Order Composition as a % of Total Non-Directed Order Type
NON DIRECT MARKET ORDERS LIMIT ORDERS OTHER ORDERS
UBS Securities LLC 47.1% 49.8% 44.1% 44.4%
Citadel Execution Services 16.9% 16.4% 17.4% 18.8%
KCG 15.3% 13.5% 17.6% 14.9%
CITIGROUP 9.7% 9.6% 9.8% 10.2%
G1X 8.7% 8.7% 8.8% 9.4%
Two Sigma 1.9% 2.0% 1.9% 2.0%

Arrangements with Market Venues

II. Securities Listed on the NYSE Amex or Regional Exchanges/Network B Eligible Securities

Summary Statistics NYSE Amex/Regionals
Non-directed orders as percentage (%) of total customer orders: 99.1%
1. Market Orders as % of total non-directed orders 57.9%
2. Limit Orders as % of total non-directed orders 37.4%
3. Other Orders as % of total non-directed orders 4.7%
Venues Receiving Significant % of Total Non-Directed Orders
 Venues % of Non-Directed Order Flow Received  Order Composition as a % of Total Non-Directed Order Type
NON DIRECT MARKET ORDERS LIMIT ORDERS OTHER ORDERS
UBS Securities LLC 45.8% 46.6% 43.5% 54.1%
Citadel Execution Services 17.2% 17.5% 17.0% 15.5%
KCG 16.2% 14.3% 19.7% 12.4%
CITIGROUP 10.0% 10.4% 9.5% 8.7%
G1X 8.9% 9.2% 8.4% 7.9%
Two Sigma 1.8% 1.9% 1.6% 1.4%

Arrangements with Market Venues

III. Securities Listed on the NASDAQ Stock Market

Summary Statistics NASDAQ
Non-directed orders as percentage (%) of total customer orders: 98.4%
1. Market Orders as % of total non-directed orders 44.9%
2. Limit Orders as % of total non-directed orders 50.2%
3. Other Orders as % of total non-directed orders 4.9%
Venues Receiving Significant % of Total Non-Directed Orders
 Venues % of Non-Directed Order Flow Received  Order Composition as a % of Total Non-Directed Order Type
NON DIRECT MARKET ORDERS LIMIT ORDERS OTHER ORDERS
UBS Securities LLC 46.5% 48.5% 44.7% 47.3%
Citadel Execution Services 17.1% 16.9% 17.1% 18.0%
KCG 16.1% 13.8% 18.3% 14.1%
CITIGROUP 9.8% 10.0% 9.5% 9.8%
G1X 8.6% 8.8% 8.4% 8.8%
Two Sigma 1.8% 1.9% 1.7% 1.8%

Arrangements with Market Venues

IV. Exchange-Listed Options

Summary Statistics Listed Options
Non-directed orders as percentage (%) of total customer orders: 100%
1. Market Orders as % of total non-directed orders 10.1%
2. Limit Orders as % of total non-directed orders 88.1%
3. Other Orders as % of total non-directed orders 1.7%
Venues Receiving Significant % of Total Non-Directed Orders
 Venues % of Non-Directed Order Flow Received  Order Composition as a % of Total Non-Directed Order Type
NON DIRECT MARKET ORDERS LIMIT ORDERS OTHER ORDERS
NYSE Arca 20.0% 0.5% 22.6% 1.2%
Chicago Board Options Exchange 19.9% 35.4% 17.7% 37.8%
NASDAQ OMX PHLX 14.5% 27.9% 12.8% 24.7%
Nasdaq Options Market 10.6% 0.4% 12.0% 0.5%
BATS Options Exchange 9.1% 0.6% 10.1% 7.7%
International Securities Exchange 9.0% 2.7% 9.7% 13.1%
MIAX 7.8% 20.6% 6.4% 2.2%
GNMI 5.0% 0.7% 5.5% 4.9%
Boston Options Exchange 1.8% 7.3% 1.2% 0.4%
NYSE-Amex Options 1.3% 2.0% 1.2% 1.7%
BATS EDGX 0.4% 0.8% 0.4% 0.0%
NSDQ OMX BX 0.3% 1.0% 0.2% 0.7%
C2 Options Exchange 0.2% 0.2% 0.1% 5.0%
Mercury 0.0% 0.1% 0.0% 0.0%

Arrangements with Market Venues