FESE Response to the ESMA Consultation on best execution

Best execution policies defined by investment firms should in general include more than one possible execution venue. Regulation should aim at a level playing field between execution venues and support a healthy mix of order flows. As an example, the ban on payment for order flow (PFOF) contributes to these objectives.

• FESE believes that single-execution venue policies should only be possible under clear rules and according to simple and observable objective criteria.
• Retail investors should make informed decisions based on clear and transparent comparisons between execution venues.
• For financial instruments that are traded in multiple venues (notably for equity markets), FESE proposes that client instructions should only be possible if the broker offers several execution venues to choose from. This should not apply to derivatives products, which are in most cases trading venue-specific.