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ARTICLE · 31 JULY 2018

OCIE Risk Alert Identifies Common Best Execution Deficiencies

Morrison Foerster
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On July 11, 2018, the SEC's Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert identifying the most common deficiencies that its staff observed in recent examinations ...

United StatesFinance and Banking
Kelley Howes
Kelley Howes
Susan I. Gault-Brown
Susan I. Gault-Brown
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On July 11, 2018, the SEC's Office of Compliance Inspections and Examinations (OCIE) published a Risk Alert identifying the most common deficiencies that its staff observed in recent examinations of registered investment advisers' best execution practices. As with prior OCIE Risk Alerts, investment advisers should carefully examine their compliance policies and procedures in light of the issues identified by OCIE and make improvements where necessary.

Background

An investment adviser that has authority to select the broker-dealers that execute securities transactions for its clients has an obligation to seek "best execution." That is, transactions should be executed "in such a manner that the client's total costs or proceeds in each transaction are the most favorable under the circumstances."

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