Best Execution
  • Home
  • Publication

    Best Execution

    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics

    Topics

    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
  • Partners
  • Listings
  • Awards

    European Women in Finance Awards

    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us

    About us

    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
  • Home
  • Publication
    • Current issue
    • Back issues
    • Profiles
    • Viewpoint
    • Market Opinion
    • Supplements
  • Topics
    • Equities Trading
    • Fixed Income Trading
    • Derivatives Trading
    • FX – Foreign Exchange
    • Post-trade
  • Partners
  • Listings
  • Awards
    • European Women in Finance – The Programme
    • European Women in Finance – The Winners
  • Events
  • About us
    • Marketing
    • Media info
    • Contact
  • Newsletter
  • Login
HomeNewsFMSB latest Spotlight Review advocates broad based ...
Previous Next

FMSB latest Spotlight Review advocates broad based best practice for execution quality

Posted by: Lynn Strongin Dodds, September 7, 2020
Tweet
Share
Share
Pin
0 Shares
FMSB latest Spotlight Review advocates broad based best practice for execution quality
Mark Yallop, chair of FMSB.

While there is a no one size fits all solution for measuring best execution and transaction cost analysis across asset classes, geographies and firms, it would be beneficial to have broad based best practices, including due diligence as to how execution quality is gauged, according to the latest FICC Markets Standards Board (FMSB) spotlight review.

The review points out that while the various regulatory requirements for measuring execution quality vary by jurisdiction and asset class, wholesale fixed income, currencies and commodities (FICC) markets face specific challenges in achieving high standards of transparency, openness and fairness.

The review notes that designing best practice focused on the measurement of execution quality “must strike a fine balance between being detailed enough to improve consistency in how market participants engage with each other while not being so prescriptive that it harms liquidity.”

It adds that given the diversity of FICC markets, the amount of trading activity and data available, product complexity, unique market structure of individuals asset classes and market segments needs to be taken account of.

Good quality data, of course, is a key component and should form part of any industry best practice. Market participants are advised to dedicate time and resources to ensure the data is collected through the appropriate use of public data sources, such as electronic trading platforms and post- trade reporting, consensus and evaluated pricing and internal historical databases.

Moreover, the review said this observed data must reflect the ‘real’ available liquidity for the relevant market participant and in the right size. It must also pass the reliability test which means there are robust processes to certify the data “is not stale or erroneous, and that there is proper time stamping and labelling.”

At the time of writing, the review said there is a limited public consensus on the data inputs and processes that should be included.

Mark Yallop, chair of FMSB, said, “This spotlight review suggests that there may be benefits to agreeing broad best practices for measuring execution quality, both to better fulfil regulatory requirements and to achieve greater operational and cost efficiency. Drawing on themes already identified in earlier Spotlight Reviews, this study highlights the importance of ensuring good quality data – from the broadest, most reliable and most appropriate sources – in order to measure the quality of trade execution.”

Rupak Ghose, senior adviser at FMSB, added, “The series of four market structure spotlight reviews focused on emerging themes such as model risk in algorithmic trading, the critical role of data management, the changing surveillance environment and processes around measuring execution quality. A common theme throughout this series is the increasing importance of data quality and technology advancements, such as machine learning, in shaping the financial market landscape.”

He added, “Ensuring that governance and industry best practice keeps up with the rapid evolution of these trends is more important than ever in today’s complex financial system.”

This Spotlight Review is intended to benefit front office trade execution on the buyside as well as within market makers, and those responsible for overseeing regulatory requirements in compliance and risk functions.

©BestExecution 2020

Back to Top

0

Tags: best execution, data, FICC, FMSB, Mark Yallop, Rupak Ghose

Share!
Tweet

Lynn Strongin Dodds

About the author
mm

Related Posts

Global investment banks not expected to hit the high revenue levels of 2021

Global investment banks not expected to hit the high revenue levels of 2021

Covid induced volatility and trading levels fuelled record breaking revenues for the world̵ ...
ESMA publishes EMIR REFIT technical standards on OTC derivatives

ESMA publishes EMIR REFIT technical standards on OTC derivatives

The European Securities and Markets Authority (ESMA) published draft technical standards under ...
French and Dutch regulators call for robust European framework for ESG data and ratings

French and Dutch regulators call for robust European framework for ESG data and ratings

The Autorité des marchés financiers (AMF) and its Dutch counterpart, the Autoriteit Financiële ...
BBH study finds middle office and outsourcing as top priorities for asset managers

BBH study finds middle office and outsourcing as top priorities for asset managers

In the post Covid world, middle office efficiencies and outsourcing are top priorities for glob ...

Leave a Reply Cancel reply

You must be logged in to post a comment.

Subscribe for Email Updates

Best Execution
Recent
  • City jobs hit by pandemic and Brexit

    City jobs hit by pandemic and Brexit

    January 18, 2021
    ISDA paper shows OTC derivatives weathered pandemic storm

    ISDA paper shows OTC derivatives weathered pandemi ...

    January 15, 2021
    DTCC paper on the repercussions of Covid for FMIs

    DTCC paper on the repercussions of Covid for FMIs

    January 13, 2021
    Sad announcement of the death of Andrew Edwards. CEO of Saxo Capital Markets

    Sad announcement of the death of Andrew Edwards. C ...

    January 13, 2021
    People: Chris McConville new sellside chair at Plato

    People: Chris McConville new sellside chair at Pla ...

    January 13, 2021

Menu

  • Home
  • Publication
  • Topics
  • Events
  • Partners
  • Listings
  • Privacy notice
  • About us

Best Execution

In these uncertain times and as the tide of regulation rises ever higher and wider, Best Execution offers an in-depth analysis into the major trends that are shaping the financial services industry as well as providing a more detailed insight into the technology driving new products and services being developed to meet these challenges.

Where the buyside and sellside meet.

Wikipedia: Best Execution

Social

linkedin
Newsletter Sign Up
Copyright © 2020 Best Execution | Site by Refractiv.
  • Home
  • Publication
  • Events
  • Privacy notice
  • Login