What does "best execution" mean in FCA regulations?

"Best execution" in FCA regulations refers to the obligation to obtain the best possible result for clients when executing their orders. This standard emphasizes that firms must take reasonable steps to ensure the best execution of client orders, considering various factors that might affect the outcome, such as price, cost, speed, likelihood of execution and settlement, and overall consideration for the client’s interests.

This principle is designed to protect investors by ensuring that they receive the most favorable terms available under the circumstances, thereby enhancing transparency and fairness in the execution process. The focus is on the outcomes for the client rather than the firm's own interests or profits. While other options may touch on aspects of client relations or pricing, "best execution" specifically safeguards the quality of service provided to clients in terms of order fulfillment and investment outcomes.