MEX CNBV Duty of Best Execution
On Feb. 19, MEX proposed variable income best execution changes.
- 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.
- 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.
||MEX CNBV; MEX GVT
||RF SHCP/51308, 2/19/2021; 05/0009/190221;
||Compliance; Operations; Suitability; Trading
||Derivatives; Securities; Variable Annuity
|Reg. Last Update
Last substantive update on 02/22/2021