Best Execution
Definition
The obligation for investment firms to take all sufficient steps to obtain the best possible result for their clients when executing orders, taking into account price, costs, speed, likelihood of execution and settlement, size, nature, and any other relevant consideration. Firms must establish and implement an order execution policy.
Regulatory Context
MiFID II significantly enhanced best execution requirements, mandating RTS 27 execution venue reporting (since suspended) and RTS 28 annual disclosure of top five execution venues. The FCA and ESMA actively supervise best execution practices through thematic reviews.