ConceptIntermediate
Best Execution
The obligation for a broker to execute client orders at the most favorable terms reasonably available, considering price, speed, and likelihood of execution.
Last updated: February 1, 2026
1
Regulatory frameworks (MiFID II, etc.) require brokers to take "all sufficient steps" to achieve best execution.
2
Brokers define their execution policy, specifying how they evaluate and select execution venues.
3
For each order, multiple factors are considered: price, speed, likelihood of execution, settlement.
4
The broker must demonstrate that its routing and execution consistently achieve favorable outcomes.
5
Regular monitoring and reporting of execution quality is required.