TY - JOUR T1 - Redefining Best Execution JF - Trading SP - 86 LP - 90 VL - 2001 IS - 1 AU - Harold S. Bradley Y1 - 2001/03/20 UR - http://guides.pm-research.com/content/2001/1/86.abstract N2 - The Securities and Exchange Commission has clearly indicated its intent to hold investment managers accountable for best execution in inspections and examinations. The Commission asks managers and traders to work together to define best execution processes and then asks for documentation to understand how processes are defined, implemented, and monitored. Traditional institutional reliance on 6 cent commission rates under a “safe harbor” may no longer be safe absent a well-articulated process for evaluating the quality of brokerage services provided, including trading, research, and IPOs. For the first time, an institution's failure to use an ECN may be viewed as a lack of attention to best execution. Clearly, institutions are increasingly conflicted by bill-paying commitments that may approach half or more of annual commissions by some firms. This change in regulatory approach may increase the scrutiny of trading practices by mutual fund boards of directors and lead to non-trivial investment in order management systems and processes. ER -