While everyone talks about “best execution”, regulators aren’t looking for every trade to set a new world record for the lowest transaction costs. At ICE Data Services, we think of best execution as a measurement of execution quality that can demonstrate that your trades are occurring within the context of current market conditions.
David Scalzetti, Senior Regulatory Products Director meets with Bill Gartland, Senior Director, Evaluated Services, to discuss the current state of Best Execution and recent developments.
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MiFID II upped the ante with the addition of language stating that “the best execution obligation under Directive 2014/65/EU requires investment firms to take all sufficient steps to obtain the best possible result for their clients.”
Our global clients have communicated to us that they are pursuing strategies to a common set of compliance standards across all regions that meet the strictest regulatory mandates.
Establishing benchmarks around illiquid instruments is one of the biggest challenges in the fixed income market; however, many attempt to create groups of “comparable” bonds for the purpose of best execution.
Analyzing pre-trade and post-trade transparency data emerging from the Best Ex process has helped to gain a deeper understanding of market dynamics.