On Jan. 30, HK SFC issued guidance on conduct for best execution.
- Issued thematic review of best execution, and effectiveness of control practices.
Summary
- Set standards of conduct, internal controls expected in delivering best execution.
- Licensed corporations (LCs) should execute client orders on best available terms.
- Fundamental to market integrity, protect investors, LCs act in client best interest.
- Now particularly important, in light of increased speed and complexity of trading.
- Execution automated and electronic, and firms offer more products and services.
Control Measures
- By governance and management supervision, best execution factors, applicability.
- Responsibility of staff, controls, monitor arrangements with affiliates, third parties.
- Take account a range of factors e,g. price, cost, speed and likelihood of execution.
