2021/11/09
What is Best Execution?
What is Best Execution?
From the SEC website “Brokers are legally required to seek the best execution reasonably available for their customers’ orders.” You will notice they don’t actually define best execution; they just state the legal obligation of brokers to seek it.
FINRA takes a stab at it “Best execution is a significant investor protection requirement that essentially obligates a broker-dealer to exercise reasonable care to execute a customer’s order in a way to obtain the most advantageous terms for the customer. As the circumstances of each order and trading environment vary, so does the determination of what is best execution.”