Mostly… fixed income and cross product eTrading

January 15, 2007

OTC Best Execution

Filed under: etrading — holky @ 8:40 pm

Does a best execution obligation arise for a dealer when a client requests a quote from that dealer for a specific OTC instrument and with specific settlement details –  then making their decision whether to trade once they see the response?

Does it make any difference if the client has asked more than one dealer to quote for the above, putting the dealers in competition with each other – then making their decision based on the responses received which (if any) one dealer they will trade with? 

If that “in competition” thing did make a difference, does the dealer need to be told they are in competition?

Should the obligation be materrially different when a client says they have a block of security to buy/sell and asks the dealer to work the order for them, using their knowledge of what specifically is important from the clients perspective (best average price, quickest route to fill, utilising particular settlement routes, ..whatever..) to get the best execution result that they can?

Are the answers as obvious as they seem?

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