2.9.5. Best Execution and Interpositioning
The best execution rule requires broker-dealers to make reasonable efforts to find as favorable a price as possible for a customer’s transaction, given the prevailing conditions of the market. However, best execution means more than getting the customer a favorable price. In deciding how and where to best execute a trade, a broker-dealer is expected to consider these factors:
•Character of the market for the security, determined by details such as its price, volatility, and liquidity
•Size and type of transaction
•Number of markets checked
•Accessibility of the quotation
•Terms and conditions of the transaction as communicated to the broker-dealer
When a member firm gets an order, it must go directly to a market maker. It cannot go through a