Client Alert

The Securities and Exchange Commission recently approved a rule change proposed by the Financial Industry Regulatory Authority, Inc. relating to the “best execution” obligation of broker-dealers. The changes adopt existing NASD Rule 2320 (Best Execution and Interpositioning) and related Interpretive Materials as new FINRA Rule 5310 and related Supplementary Material with the following changes:

  •  Replacing the “Three Quote Rule” with Supplementary Material describing best execution obligations;

  •  Codifying existing guidance on regular and rigorous review of execution quality likely to be obtained from

    different market centers;

  •  Adding new Supplementary Material concerning orders for foreign securities with no US market; and

  •  Adding new Supplementary Material concerning customer instructions regarding order  routing. 

Relevant Documents

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