FYI: Best Execution Risk Alert
Posted onFYI: Yesterday OCIE issued a Risk Alert listing examples of many of the most common best execution (BE) deficiencies encountered in IA examinations, including: • Not performing BE reviews. IAs are expected to demonstrate through documentation that they periodically and systematically evaluate the performance of the BDs used to execute client transactions. • Not considering materially relevant factors during BE reviews. Qualitative factors (responsiveness, financial responsibility, etc.) as well as quantitative factors (commission rate, etc.) should be considered. As relevant, input from the IA’s traders and portfolio managers should be solicited. • Not seeking comparisons from other BDs. Comparisons should […]