Understanding Execution & Order Routing

Charles Schwab & Co., Inc.

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After you place an order, the work really begins. In order to provide an exceptional execution, there are a number of factors to be considered including: execution price, opportunities for price improvement, market depth, order size, the type of security, speed,accuracy and system availability.

A commitment to ethical practices

In 2001, the Securities and Exchange Commission began to require brokerages to disclose their order-routing practices. The SEC also created a set of criteria for measuring order execution at the market centers that receive orders from broker-dealers. At Schwab, we work diligently to meet and exceed these requirements, and to ensure we work toward our clients’ best interests.

The SEC Order Routing Disclosure Rules provide transparency across the market and enable us to better assess execution quality. This information helps us make more informed routing decisions and to provide you with improved execution quality and service.

Another example of the commitment to quality execution is the increased automation provided by proprietary technology at UBS Securities LLC. By minimizing the chances of human bias or error inherent in manual order processing, all of our clients gain a higher level of execution quality, regardless of how and when an order is placed or for whom.

Because the trading environment is constantly changing, we regularly and rigorously monitor our order-routing and execution processes. This discipline enables us to assist our clients in receiving the best execution possible. We are committed to ensuring that you always know and understand the factors that affect the quality of your order execution

Order routing

We regularly monitor the execution quality provided by different exchanges and liquidity providers. In arranging for the execution of your orders, Schwab seeks out industry leading execution services and access to the best performing markets.

Quarterly information regarding the routing of orders by Schwab in listed equities, OTC equities and listed options is available on the SEC 606 Order Routing Disclosures page.

Regulation NMS and Rule 611—Detailed information on the new regulation and how it may affect you.

(0804-9008)

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