EVER HEAR OF THE BEST EXECUTION RULE? BE ABLE TO DESCRIBE THE RULE AND ITS CONTENTS FOR SERIES 6 EXAM

What is the "Best Execution Rule"? Can you define and describe the Rule?  The Series 6 Exam may ask you questions about the Best Execution Rule, so be prepared.

FINRA publishes a Content Outline for the Series 6 Exam, and it lists the "Best Execution Rule" in Section 4.1. It also refers to FINRA Rule 5310 that governs both the Best Execution Rule and Interpositioning.

Bob Eder in his Study for the Series 6 Exam discusses the Best Execution Rule on page 266 and Interpositioning on page 289. Here is a sample of Bob Eder's treatment:

Best Execution Rule (4.1)

When a client gives an order to buy or sell securities, a broker or representative has an obligation to make sure that the client pays the lowest price available, if the client is buying, or receives the highest price available, if selling. This is called "best execution." Especially in the Nasdaq market, there might be five, 10, or 15 dealers taking the other side who will buy or sell. The prices that these dealers publish can vary considerably, one from the other. Thus, the requirement of an adviser or broker to match the client's order with the best available price on the other side. 

Here is the link to FINRA's Content Outline for the Series 6 Exam. See the references to Best Execution Rule in FINRA's Content Outline, Section 4.1.

Study for the Series 6 Exam is available from Amazon in both paperback and Kindle e-book versions. Here is the link to Bob Eder's Series 6 Exam study manual on Amazon.

See Bob Eder's Author Page on Amazon.com.

For questions about Bob Eder's Study for the Series 6 Exam, or questions in general about the Series 6 Exam, such as the Best Execution Rule, feel free to email Bob Eder at bobeder@bobeder.net.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. 

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