Best Execution
Best Ex is a complicated subject, but one asset managers and hedge funds have to get right.
Failure to be able to evidence Best Ex has ramifications way above the Trading Desk. SMCR means there can be Senior Management responsibilities up to and including the C Suite which need to be managed.
Quite apart from the reputational damage which could be inflicted on the firm as a whole from a regulatory failing in such a high-profile area of the business.
In response to enquiries on this subject from managers Ergo created Best Ex as a service.
The first stage of “Best Ex a service” is a strategic review of what a firm actually does in its pursuit of Best Execution versus what it says it does in its own Best Execution policy.
The second stage is to create a roadmap to “Better Execution” based on these findings.
The ultimate aim of “Best Execution as a service” is to support traders, compliance professionals and senior management by providing independent external oversight of the ongoing process of creating better execution to create robust answers to regulators and potential investors whilst improving alpha retention and fund outcomes.
The 6 features of Best Execution as a service:
1. Review what the firm says it does against what actually happens in reality.
2. Identify that the firm’s identification of outlying trades is optimal.
3. Avoid duplication in the review process up to and including the Best Ex committee.
4. Design and manage the Best Ex committee make up and evaluation process.
5. Provide external validation and best of breed solutions to improve fund outcomes.
6. Protect the trading desk, compliance staff and SMCR registered senior managers.
Best Ex is not easy to evidence though because as anyone who understands the maths behind infinite probability will tell you it is nearly impossible to execute at ‘the best price in the world’ on every trade consistently forever, which is why Best Ex is not about price, but process.
Contact us for more details.
Failure to be able to evidence Best Ex has ramifications way above the Trading Desk. SMCR means there can be Senior Management responsibilities up to and including the C Suite which need to be managed.
Quite apart from the reputational damage which could be inflicted on the firm as a whole from a regulatory failing in such a high-profile area of the business.
In response to enquiries on this subject from managers Ergo created Best Ex as a service.
The first stage of “Best Ex a service” is a strategic review of what a firm actually does in its pursuit of Best Execution versus what it says it does in its own Best Execution policy.
The second stage is to create a roadmap to “Better Execution” based on these findings.
The ultimate aim of “Best Execution as a service” is to support traders, compliance professionals and senior management by providing independent external oversight of the ongoing process of creating better execution to create robust answers to regulators and potential investors whilst improving alpha retention and fund outcomes.
The 6 features of Best Execution as a service:
1. Review what the firm says it does against what actually happens in reality.
2. Identify that the firm’s identification of outlying trades is optimal.
3. Avoid duplication in the review process up to and including the Best Ex committee.
4. Design and manage the Best Ex committee make up and evaluation process.
5. Provide external validation and best of breed solutions to improve fund outcomes.
6. Protect the trading desk, compliance staff and SMCR registered senior managers.
Best Ex is not easy to evidence though because as anyone who understands the maths behind infinite probability will tell you it is nearly impossible to execute at ‘the best price in the world’ on every trade consistently forever, which is why Best Ex is not about price, but process.
Contact us for more details.