Commentary

Elaine Wah

Modern Markets, Modern Metrics - A Blog By IEX

In this blog by IEX's Elaine Wah, the newest public exchange looks to refute public claims that the metrics it uses are designed to inflate its own volume numbers and mislead people.

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In his first public speech, SEC Chair Jay Clayton deviated from his prepared remarks and offered his own "off the cuff" comments on market issues. Do you like this change of pace?




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April 1, 2003

Firms Face SEC Best Execution Actions

By Gregory Bresiger

The Securities and Exchange Commission is about to launch a series of enforcement actions against firms that aren't meeting best execution standards, according to people familiar with the situation.

One published report said the SEC is in "a get-tough mode" with broker dealers that do not use order routing information to provide best execution.

Tough Steps

Lori Richards, director of the Office of Compliance Inspections and Examinations, said the SEC is going to become "very aggressive" on best execution enforcement.

A former SEC official said that the agency generally had not been forceful in this area.

"That's because best execution is a very difficult kind of enforcement action," Mark Borrelli, a former assistant regional director in enforcement for the SEC, told Traders Magazine.

Borrelli said that he doesn't expect to see many best execution only enforcement actions. He predicts that they will be coupled with other potential violations such as conflict-of-interest charges.

"Best execution is an area that the SEC has traditionally shoved into the background," Borrelli said.

The Problem

Best execution standards are often nebulous, many trading industry executives have charged. "The standard requires the regulators to recreate a market," Borelli said. And that, he conceded, is a very difficult exercise.