Replies to post #111592 on Lehman Brothers Financial SA (LEHNQ)

[cottonisking]

Broker-dealers have several best execution obligations, including:

Reasonable diligence
Broker-dealers must use reasonable diligence to find the best market for a security and buy or sell in that market. This means they must try to get the most favorable price for the customer under the current market conditions.

Regular reviews
Broker-dealers must regularly review the quality of their customers' orders. If they don't review each order, they must have procedures in place to ensure regular and rigorous reviews.

No transfer of duty
Broker-dealers cannot transfer their best execution duty to another person.

No routing without review
Broker-dealers cannot route all of their customer orders to another firm without reviewing the execution quality.

Prompt execution
Broker-dealers must process customer transactions promptly.

Follow customer instructions
If a customer instructs a broker-dealer to execute a transaction in a specific market, the broker-dealer must follow those instructions.

Factors that broker-dealers consider when executing orders include: The likelihood of the trade being executed, The speed of execution, The opportunity for a better price than the quoted price, The time for settlement, and The size of the trade.

The SEC proposed a new Regulation Best Execution in December 2022. The proposal would require broker-dealers to:
Establish, maintain, and enforce written policies and procedures
Review the execution quality of customer transactions at least quarterly
Revise their best execution policies and procedures
Document the results of their review and assessment


finra
5310. Best Execution and Interpositioning | FINRA.org
5310. Best Execution and Interpositioning * • • • Supplementary Material: -------------- * . 01 Execution of Marketable Customer Orders. A member must make eve...