Are your clients getting the best stock prices?

By Staff | March 31, 2014 | Last updated on March 31, 2014
2 min read

It’s becoming more complicated for dealers to execute trades with the best possible combination of price and efficiency for your client, says IIROC.

“Changes in technology and market structure have increased order handling complexity. The multiple-marketplace environment has also broadened the range of practices that can be used to achieve best execution,” said Wendy Rudd, IIROC senior vice president of market regulation and policy.

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The regulator surveyed 143 dealers in winter 2012-2013 on their best execution practices. The results will help IIROC develop further rules and guidance to help securities dealers adhere to best execution rules.

Most firms use smart order routers to ensure best trade execution, the survey finds. The majority can also customize some or all of the router settings for their orders. Some of the things that would make a firm re-think how they route orders include the launch of a new marketplace, changes in liquidity patterns, technology, or marketplace fees, and the launch of a dark marketplace.

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The survey found that 60% of firms don’t subscribe to a dark marketplace, while 35% subscribed to one or more dark marketplaces, and 5% subscribed to all available dark marketplaces

The majority of firms determine their approach to best execution as they go along, the survey indicates, with 45% holding meetings on an as-needed basis. Quarterly meetings on best execution were common for 25% of firms surveyed, and they were most common for discount brokers. Further, 11% discuss their best-execution strategies annually, while 13% never meet.

Read: Order rules may stifle retail trading

For more on how dealers handle trades, click here. staff


The staff of have been covering news for financial advisors since 1998.