The Roots of Best Execution Best execution encompasses a number of factors starting with the price of the execution and the opportunity for price improvement. Other factors include speed and likelihood of execution. For institutional investors, anonymity and liquidity might be overriding concerns. In any case, the quality of execution must always be viewed from the customer's perspective, not the firm's. At the same time, increased competition among market centers has provided new execution alternatives.
Some market centers guarantee immediate automated execution of trades.
Others promise the possibility of price improvement. And some use a transparent book which is visible to any customer via the Internet. Recently, I called on the SEC's examiners to review how firms are complying with their obligation to seek best execution for retail customers. But it's becoming increasingly clear that's not always the case. Some firms, for example, have told us that execution speed is the most important factor in their routing decisions.