Best Execution (also referred to in German; less frequently

Best Execution Policy): The obligation for financial service providers to execute client orders – on the most favorable terms and – in a manner that is comprehensible to the client, as well as – making all fees transparent in the process. Required by the EU Markets in Financial Instruments Directive and monitored by supervisory authorities. – However, the Directive does not require a bank to demonstrate the “best possible result” (Art. 21 Mifid). Rather, institutions must demonstrate transparent principles for the overall handling of orders, compliance with which and effectiveness must be monitored. – See Order Delay, Best Advice, Conflict of Interest, Securities Services Conduct and Organization Regulation. – See BaFin Annual Report 2008, p. 140 (focus of BaFin’s monitoring; pp. 142 f. (explaining the term “best execution” in Section 33a WpHG; execution principles), ECB Annual Report 2012, p. 134 (recast Markets in Financial Instruments Directive).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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