Application of Best Execution - COBS Provision: Difference between revisions

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{{cobsanat|11.2.2}}
{{cobsanat|11.2.2}}
Guidance as to 11.2.2R provides:
Guidance as to 11.2.2R provides:
 
The obligation to deliver the best possible result when executing {{fcaprov|client}} orders applies in relation to all types of {{fcaprov|financial instruments}}. However, given the differences in market structures or the structure of {{fcaprov|financial instruments}}, it may be difficult to identify and apply a uniform standard of and procedure for best execution that would be valid and effective for all classes of instrument. Best execution obligations should therefore be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular types of {{fcaprov|financial instruments}}. For example, transactions involving a customised OTC {{fcaprov|financial instrument}} that involve a unique contractual relationship tailored to the circumstances of the {{fcaprov|client}} and the {{fcaprov|firm}} may not be comparable for best execution purposes with transactions involving shares traded on centralised execution venues.
{{box|The obligation to deliver the best possible result when executing {{fcaprov|client}} orders applies in relation to all types of {{fcaprov|financial instruments}}. However, given the differences in market structures or the structure of {{fcaprov|financial instruments}}, it may be difficult to identify and apply a uniform standard of and procedure for best execution that would be valid and effective for all classes of instrument. Best execution obligations should therefore be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular types of {{fcaprov|financial instruments}}. For example, transactions involving a customised OTC {{fcaprov|financial instrument}} that involve a unique contractual relationship tailored to the circumstances of the {{fcaprov|client}} and the {{fcaprov|firm}} may not be comparable for best execution purposes with transactions involving shares traded on centralised execution venues.}}

Revision as of 12:16, 20 December 2018

The JC’s Reg and Leg resource™
UK Edition


To see the current text of COBS 11.2.2 in the FCA handbook, click here.


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Guidance as to 11.2.2R provides: The obligation to deliver the best possible result when executing client orders applies in relation to all types of financial instruments. However, given the differences in market structures or the structure of financial instruments, it may be difficult to identify and apply a uniform standard of and procedure for best execution that would be valid and effective for all classes of instrument. Best execution obligations should therefore be applied in a manner that takes into account the different circumstances associated with the execution of orders related to particular types of financial instruments. For example, transactions involving a customised OTC financial instrument that involve a unique contractual relationship tailored to the circumstances of the client and the firm may not be comparable for best execution purposes with transactions involving shares traded on centralised execution venues.

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