
By Frank Childress
Subscribe to our original industry insightsIn its 2022 Report on FINRA’s Examination and Risk Monitoring Program, FINRA continues to focus on Best Execution (Rule 5310), as outlined in the Market Integrity area, and on disclosure of routing information. There are several tasks firms should be doing to achieve compliance and stay ahead of the regulatory curve.
“Reasonable diligence” and “regular and rigorous” are phrases imbedded within all Best Execution reviews. As FINRA and the industry move beyond execution quality and price improvement, consider new frontiers such as customer fill rates and execution quality for fractional/notional orders.
What should broker-dealers be doing?
Regulation National Market System (NMS) has now been with the industry for nearly 20 years; however, it is only recently that the industry and regulators have initiated material modernization to the rule to adapt to much faster and complex equity markets. FINRA Rule 606 provides transparency for investors on where orders are routed and disclosure of real and potential conflicts of interest.
What should broker-dealers be doing?
Oyster’s experts have significant experience with Best Execution and Order Routing compliance. Our consultants perform reviews of procedures, routing practices, technology, vendor solutions, disclosures, and ensure that a “regular and rigorous” program is in place. Leverage our experience to make your compliance program efficient and effective.
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