In their own interest

Author: | Published: 1 Nov 2007

The best execution provisions of the Markets in Financial Instruments Directive (Mifid) are a key component to one of its prime policy objectives of investor protection. They are intended to promote market efficiency and afford individual investors protection in execution quality. They have also been the subject of more debate than any other of the Directive's 73 articles. The levels of industry engagement and lobbying on this topic, at both a national and a European level, testify to its importance in the client relationship. So what exactly was all the fuss about?

Article 21 of Mifid states:

"Investment firms must take all reasonable steps to obtain, when executing orders, the best possible results for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. Nevertheless, whenever there is a specific instruction from the client...