Best Execution in Fixed Income: A Work in Progress
The legislatively-driven shift in fixed income in the wake of the 2008 financial crisis requires a reevaluation of long-standing execution standards. The proliferation of real-time trade data and regulatory initiatives driving the fixed income marketplace to new levels of transparency is the starting point in a race to a new definition of best execution. However, for credit market participants, many roadblocks remain. Pricing is central to the problem.
The time when market participants could independently benchmark their own execution performance in such a way to adequately satisfy internal compliance or fiduciary obligations is gone. These changes are particularly important to buy-side participants on both sides of the pond. Traditional metrics such as dealer quotes and TRACE feeds are no longer sufficient as stand-alone metrics for price discovery
This TABB Group report, Best Execution in Fixed Income: A Work in Progress, examines the growing array of third-party TCA solutions within fixed income, the different approaches each solution takes to satisfying evolving best execution standards, and the ways in which these new tools can be incorporated into existing workflow.
- Fixed Income