Best Execution overview
Best Execution is a complex and evolving discipline, but one that asset managers and hedge funds must get right. It sits at the intersection of trading judgement, market structure, data, governance and regulatory oversight, and failures in any one of those areas can have consequences well beyond the trading desk.
The ability to evidence Best Execution is now a senior management issue. Under SMCR, accountability can extend up to and including the C-suite, requiring firms to demonstrate not just outcomes, but a coherent and well-governed process. Beyond regulatory scrutiny, shortcomings in this area can also lead to reputational damage and difficult conversations with clients and prospective investors.
Best Execution is often misunderstood as a purely quantitative exercise, focused on whether a trade achieved the lowest possible price. In reality, consistently achieving the single best price in all market conditions is neither realistic nor the regulatory expectation. Best Execution is fundamentally about process: how decisions are made, how they are reviewed, how exceptions are handled and how learning is embedded over time.
In response to increasing demand from managers for practical, defensible solutions in this area, Ergo developed Best Execution as a Service. The service is designed to help firms assess, strengthen and maintain their Best Execution framework, providing independent oversight that supports traders, compliance teams and senior management alike.
For more detail, please see the separate sections on the Best Execution Health Check and Best Execution as a Service, which explain the two offerings that sit behind this approach in more depth.
The ability to evidence Best Execution is now a senior management issue. Under SMCR, accountability can extend up to and including the C-suite, requiring firms to demonstrate not just outcomes, but a coherent and well-governed process. Beyond regulatory scrutiny, shortcomings in this area can also lead to reputational damage and difficult conversations with clients and prospective investors.
Best Execution is often misunderstood as a purely quantitative exercise, focused on whether a trade achieved the lowest possible price. In reality, consistently achieving the single best price in all market conditions is neither realistic nor the regulatory expectation. Best Execution is fundamentally about process: how decisions are made, how they are reviewed, how exceptions are handled and how learning is embedded over time.
In response to increasing demand from managers for practical, defensible solutions in this area, Ergo developed Best Execution as a Service. The service is designed to help firms assess, strengthen and maintain their Best Execution framework, providing independent oversight that supports traders, compliance teams and senior management alike.
For more detail, please see the separate sections on the Best Execution Health Check and Best Execution as a Service, which explain the two offerings that sit behind this approach in more depth.