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Commissioner Roisman Hints at Best Execution Guidance or Interpretation

At a recent conference SEC Commissioner Elad Roisman said it was time to reassess regulatory clarity around best execution, “especially if the current lack of guidance may hinder the ability of firms to satisfy best execution in a flexible, practical, and principles-based manner.” While the premise of best execution is to seek the most favorable terms for a transaction under the circumstances, other factors including price and speed “may be determinative inputs after a broker analyzes its regulatory best execution requirements,” Roisman added and suggested that the SEC could provide additional interpretation of, or guidance on, the current regulatory requirements.  “I believe regulation should set a baseline and allow for firms to go further than what is required to satisfy best execution, when they choose to do so for commercial purposes,” Roisman said.A report in Think Advisor quoted Division of Trading and Markets Chief Brett Redfearn who spoke at the same conference. Redfearn said Trading and Markets is also very focused on best execution while noting challenges -- including defining best execution in light of the differences in institutional trading compared to the retail side of the broker dealer market.

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