SIE: No Interpositioning

No 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