8.4.2.3.9. Best Execution and Interpositioning
Brokers and dealers are required to make reasonable efforts to find as favorable a price as possible for a customer’s transaction, given the prevailing conditions of the market. In deciding how and where to execute a trade, a broker-dealer is expected to consider these factors:
• The character of the market for the security, such as its price, volatility, and liquidity
• The size and the type of transaction
• The number of markets checked
• The information reviewed to determine the current market for the security
• The accessibility of the quote
• The terms and conditions of the transaction as communicated to the broker-dealer
The following are examples of characteristics that can be used to determine if two securities are similar:
• Issuer
• Source of repayment
• Credit rating
• Coupon
• Maturity
• Redemption features
• Sector of the market
• Geo