Application of Best Execution - COBS Provision: Difference between revisions

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-{{cobsanat|11|2|2}}
+{{cobsanat|11|2A|7}}
-Guidance as to 11.2.2R provides:
+Guidance at 11.2A.7 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.
+''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 and 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 to take into account the different circumstances surrounding the execution of orders for particular types of {{fcaprov|financial instrument}}. For example, transactions involving a customised OTC {{fcaprov|financial instrument}} with a unique contractual relationship tailored to the circumstances of the {{fcaprov|client}} and the firm may not be comparable for best execution purposes with transactions involving [[shares]] traded on centralised execution venues. As [[best execution]] obligations apply to all {{fcaprov|financial instruments}}, irrespective of whether they are traded on trading venues or [[OTC]], {{fcaprov|firm}}s should gather relevant market data in order to check whether the [[OTC]] price offered for a client is fair and delivers on the [[best execution]] obligation.''