Core terms
Smart order routing (SOR)
A router that chooses the venue or venues for an order, and may split it, according to the broker's or platform's criteria such as price, fill rate, fees and rebates. A direct route instead sends the order to one venue the trader picks.
On a marketable order, a smart route typically splits across venues showing the price and can sweep several levels up to the limit; on a resting order it picks where to post and sometimes moves it. A direct route goes to one venue, fills what is there and rests or cancels the rest. Neither is free: a direct order can arrive after the displayed size is gone, and a smart route can pay more in taker fees to fill.
Regulation NMS Rule 611 requires trading centers to have policies designed to prevent trade-throughs of protected quotations; an intermarket sweep order lets a router take the best prices on several venues at once. In June 2026 the SEC proposed rescinding Rule 611 (Release No. 34-105655); as of 2026-10-05 that is a proposal, not a final rule.
Routing disclosures
Broker-dealers publish quarterly Rule 606 reports on where they routed customers' non-directed orders, including payment for order flow received.
What traders should verify
Record the route on each order with its result (filled, partly filled or missed) and the fee or rebate per share, so routes can be compared on the same kind of order.
Do not conflate
Trader usage; there is no official definition, and each router optimises its broker's own criteria, which can include payment for order flow. Rule 606 reports describe what a router is built to do, not how a particular order fills.
Primary source
Primary sourceRegulation NMS Rule 611, 17 CFR 242.611