Dealing with a process without end: Taking a more pragmatic approach to Best Execution in FX 

Best execution in FX can be seen as an ongoing process and not an end-point to be reached. We explore that concept and why the demands it makes are forcing risk managers and treasury professionals to engage with the process in much deeper ways.

Typically, new regulations imposed on the capital markets will often be met with, at best, skepticism and, at worst, a sense of dread as to the impending demands and burdens it will place on market participants.  The behemoth piece of European Union legislation – the second iteration of the Markets in Financial Instruments Directive (MiFID II) – was greeted in similar fashion, and was complex and difficult enough to be delayed by a year until January 3, 2018, given the necessary IT systems that needed to be built.  For investment firms caught up in the regulation, one of the most significant changes to their day-to-day trading lives has been the best execution requirements which aligns their goals with their clients by being able to provide evidence of achieving the best possible results when trading different asset classes.  This does not necessarily mean the buy side needs to get the best price – a common misconception. Instead, the rule focuses on internal compliance...continued

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