Best Execution Obligations

What this video covers

• The reasonable diligence standard: what it means and why perfection is not required
• The five factors a firm must weigh to demonstrate best execution under prevailing market conditions
• What interpositioning is, and when adding a third party becomes a violation versus a permissible better execution
• Why the burden of proof for justifying interpositioning falls entirely on the firm, never the customer
• What payment for order flow (PFOF) is, and why accepting it never excuses a worse price for the customer
• The mandatory disclosure requirement for payment for order flow on customer trade confirmations
• Why best execution applies to all customer orders regardless of how they arrive at the firm