"This is the next generation of technology; smart software that routes orders to the best execution," said Michael O. Sanderson, a former executive of Reuters Instinett electronic trading network who is chief executive of MarketXT.
There appears to have been some creative legal thinking that suggested that Finra's requirement for "best execution" of trades would bar executing trades in illiquid markets at prices the broker deemed unreasonable.
What does "best execution" mean for products that are traded off-exchange?
"In an ideal world, a router would simply look for the best execution," Mr. Christiansen said.
And "best execution" does not necessarily mean the lowest possible spread in foreign exchange rates.
A decade ago, there was an obligation for "best execution" of orders.
Trading should be done in ways that get clients the best execution, and maximise performance.
Then again, even the best execution and intentions do not guarantee success.
But if he really wants best execution, he should take care not to cut off innovation in its prime.
The retail brokers contend that the internalizers allow them to get the quickest and best execution for their customers.
