OMAHA, Neb.--(BUSINESS WIRE)--
TD Ameritrade Holding Corporation (NYSE:AMTD) is today disclosing
information as it relates to revenue sharing1 it receives for
the trade orders routed to market destinations for execution. The
Company plans to disclose this revenue on a quarterly basis, beginning
with its June Quarter earnings release in July 2014.
The Company earned order routing revenue of $236 million, $184 million
and $185 million for fiscal years 2013, 2012 and 2011, respectively.
Note that less than 50 percent of its 2013 revenue sharing came from
TD Ameritrade employs sophisticated order routing technology and
processes to help it meet its obligations to seek best execution for
client orders. The system is flexible, with the ability to route to
several destinations in an effort to seek best execution quality.
Clients also have the option to choose from a list of direct-routing
TD Ameritrade does not internalize its clients' orders. Instead, it
works with multiple market destinations to encourage competition and
create redundancies that help maintain a seamless client experience. The
Company holds these market destinations to high performance standards,
as it evaluates their stability, execution quality and consistency
daily. In the unlikely event of a degradation of service, TD Ameritrade
has the flexibility to adjust by quickly routing orders to another
venue. Information regarding the revenue sharing arrangements the
Company's broker dealer subsidiaries have with each of these market
destinations is disclosed publicly via SEC Rule 606 reports, client
agreements and client account statements.
"Many market destinations are in the business of making markets. They
provide liquidity, and revenue sharing is part of their business model,"
said Fred Tomczyk, president and chief executive officer. "There exist
today comprehensive regulations and oversight, disclosure and industry
competition, as well as the many checks and balances we have implemented
over the years, to ensure that we remain focused on satisfying our
obligation to seek best execution on behalf of our clients. Without
their trust and satisfaction we wouldn't have a business, and we could
not maintain either of them if we didn't deliver on our promises to the
best of our abilities."
"The facts show that execution quality for retail investors has never
been better," Tomczyk continued. "Costs are lower than ever, spreads
have narrowed significantly, liquidity has increased, and execution
speed has improved. But it can be better. Just as we are continually
seeking to improve our client experience, we as an industry should
continue to examine ways in which we can improve our nation's market
structure - without compromising the many improvements that currently
exist. We have long been a part of conversations around market
structure, representing one of the largest bases of retail investors in
the country, and we will continue to do so."
The Company will be sharing its views on this topic and other market
structure-related issues when it appears before the Senate's Permanent
Subcommittee on Investigations on Tuesday, June 17, 2014.
About TD Ameritrade Holding Corporation
Millions of investors and independent registered investment advisors
(RIAs) have turned to TD Ameritrade's (NYSE:AMTD) technology,
to help make investing and trading easier to understand and do. Online
or over the phone. In a branch or with an independent RIA. First-timer
or sophisticated trader. Our clients want to take control, and we help
them decide how - bringing Wall Street to Main Street for more than 39
years. An official
sponsor of the 2014 and 2016 U.S. Olympic and Paralympic Teams,
TD Ameritrade has time and again been recognized
as a leader in investment services. Please visit TD Ameritrade's newsroom
for more information.
Brokerage services provided by TD Ameritrade, Inc., member FINRA (www.FINRA.org)
This document contains forward-looking statements within the meaning of
the federal securities laws. We intend these forward-looking statements
to be covered by the safe harbor provisions of the federal securities
laws. In particular, any projections regarding our future revenues,
expenses, earnings, capital expenditures, effective tax rates, client
trading activity, accounts or stock price, as well as the assumptions on
which such expectations are based, are forward-looking statements. These
statements reflect only our current expectations and are not guarantees
of future performance or results. These statements involve risks,
uncertainties and assumptions that could cause actual results or
performance to differ materially from those contained in the
forward-looking statements. These risks, uncertainties and assumptions
include, but are not limited to: general economic and political
conditions and other securities industry risks, fluctuations in interest
rates, stock market fluctuations and changes in client trading activity,
credit risk with clients and counterparties, increased competition,
systems failures, delays and capacity constraints, network security
risks, liquidity risks, new laws and regulations affecting our business,
regulatory and legal matters and uncertainties and other risk factors
described in our latest Annual Report on Form 10-K, filed with the SEC
on Nov. 22, 2013 and our latest Quarterly Report on Form 10-Q filed
thereafter. These forward-looking statements speak only as of the date
on which the statements were made. We undertake no obligation to update
or revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, except to the extent
required by the federal securities laws.
1 Also sometimes referred to as "payment for order flow".
Source: TD Ameritrade Holding Corporation
Source: TD Ameritrade Holding Corporation