PartnerEx
The principle of Best Execution is a requirement of MiFID, which came into force in November 2007, and has long been lacking for retail investors. The complexity of the new trading landscape and the importance of related costs have so far been a major obstacle in the realisation of best execution.
To provide real best execution to their clients, brokers would have to connect to all new venues, adapt to their post-trade environment and develop efficient SOR systems. These changes have proved too costly to be implemented by all.
PartnerEx is unique market segment designed to allow brokers dealing with retail flow to provide Best Execution to their clients in a cost-effective way.
Guaranteed Best Execution
In PartnerEx, relationships between Market Makers and Order Flow Providers (OFPs) are configured to guarantee Best Execution on a Regulated Market.
PartnerEx Market Makers commit to execute their OFP's orders at the best available Volume Weighted Average Price (VWAP) calculated by the exchange and based on the best available visible liquidity across Europe's major exhanges, up to a pre-agreed volume per order.
The parameters of PartnerEx relationships are established in an agreement between Market Makers and Order Flow Providers and include:
- Stock coverage
- Maximum order size
- Price improvement (optional)
- Split of trading fees (optional)
- Custom clearing and settlement (optional)
Best Price - VBBO
Equiduct calculates the VBBO for all PartnerEx eligible instruments based on the visible liquidity from Europe's major trading venues in real time.
The VBBO is the best bid/offer price clients would obtain if they achieved the optimal partial executions on all the reference markets.
Find out more about VBBO
Best Execution Report
Equiduct provides to its members:
- A daily Best Execution file simulating the Home Market price compared to VBBO for any of their order executed on PartnerEX.
- Monthly reports containing several Best Execution indicators.
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