Notice to Members 01-22
NASD Regulation Reiterates Member Firm Best Execution Obligations and Provides Guidance to Members Concerning Compliance
The National Association of Securities Dealers, Inc. (NASD® or Association) is issuing this Notice to reiterate the best execution obligations that apply to member firms when they receive, handle, route for execution, or execute customer orders, and to provide guidance to members concerning a broker/ dealer's obligation, as articulated on numerous occasions by the Securities and Exchange Commission (SEC), to regularly and rigorously examine execution quality likely to be obtained from the different markets or market makers trading a security. This Notice also discusses how recently-adopted SEC rules concerning the disclosure of order execution and routing practices will assist members in meeting their regular and rigorous examination obligation. In addition, this Notice includes a Question and Answer section that responds to many of the compliance questions that the NASD has received from its members concerning the regular and rigorous component of the duty of best execution.
If members have additional questions regarding these issues, please contact the Legal Section, Market Regulation Department, NASD Regulation, Inc. (NASD Regulation), at (240) 386-5126.