MEX CNBV issued draft resolution to modify general provisions for brokerage firms.
Regulatory proposal aims to strengthen the legal framework applicable to the duty of best or better execution that brokerage houses must abide by on client orders.
Orders received by clients are executed considering the best price available on the stock exchanges, taking into account the market conditions at the time of execution.
Amendment Highlights
Brokerage houses may provide their clients with direct electronic access channels, to send instructions immediately to the electronic trading systems of a stock exchange.
Orders placed in this way won't be subject to distribution of daily passive positions and monthly daily average sent to stock exchanges, nor to the duty of better execution.
Brokers, in the transmission of passive positions of variable income, must make best effort to transmit daily to each exchange a number of passive positions.
Said passive positions must represent at least 30% of broker's daily passive positions.
Passive position is understood to be one that, when entering stock exchanges, does not perfect a transaction and remains waiting for a contrary position to execute it.
Firms must have automated systems for executing variable income securities orders that factor in best price available and volume of said security available on exchanges.
Effectiveness
Draft resolution effective four months after publication in the official gazette.
Brokerage firms will have up to two months from official publication to make modifications to their manuals and systems, and to update measures and controls.
MEX CNBV will have until the effective date of this resolution to approve the aforementioned modifications to the manuals and systems of brokerage firms.
