On 31 July 2014, the FCA announced that following a review, it found that firms were failing to deliver best execution for both retail and professional clients when trading on their behalf. The FCA found that many firms do not: (i) understand the rules properly;(ii) control client costs when executing orders; or (iii) have sufficient managerial oversight of staff delivering best execution. The FCA expects all firms to review their best execution arrangements and take action to ensure that they comply with the rules. The FCA best execution rules will be amended once MiFID II is applicable in 2017. Under MiFID II, firms will be subject to a range of new requirements including disclosure of the top five most frequently used venues by the firm, disclosure of the costs of execution venues used by the firm, a ban on remuneration for routing client orders and stricter criteria for order execution policies.
The FCA announcement is available at: http://www.fca.org.uk/news/fca-finds-firms-fail-to-deliver-best-execution.