What Is Best Execution?
A regulatory obligation requiring broker-dealers to execute customer orders in a manner that is most favorable to the client in terms of price, speed, and certainty of settlement. Failure to achieve best execution can result in fines and arbitration awards.
Best Execution across 4 exams
Best Execution appears on the following exams. Each defines it in the context candidates are tested on:
- Series 7
- A regulatory obligation requiring broker-dealers to execute customer orders in a manner that is most favorable to the client in terms of price, speed, and certainty of settlement. Failure to achieve best execution can result in fines and arbitration awards.
- Series 24
- The obligation to execute customer orders at prices and in a manner that are most favorable given prevailing market conditions. Principals monitor execution quality metrics, compare pricing across venues, and remediate instances where best execution may have been compromised.
- Series 57
- A broker-dealer's obligation to execute customer orders at the best available prices and conditions considering factors like speed, likelihood of execution, settlement, size, and nature. This is a fundamental requirement under securities regulations.
- Series 9/10
- An obligation requiring broker-dealers to execute customer orders in a manner that produces the most favorable terms reasonably available. A sales supervisor monitors order execution quality and ensures representatives execute orders promptly and at fair prices.