Off-Exchange Market Makers and Their Best Execution Obligations: An Evolving Mixture of Market Reform, Regulatory Enforcement, and Litigation

NYU Journal of Law & Business, Vol. 17, No. 3, pp. 477-545, 2021

70 Pages Posted: 18 Feb 2021 Last revised: 27 Aug 2021

Date Written: August 26, 2021

Abstract

This Article analyzes the reach of the duty of best execution to off-exchange market makers and its implications in the evolving equity market structure. The Article covers such key themes as a comparative regulatory perspective on the source of the duty of best execution and business practices in off-exchange market making, recent enforcement actions involving off-exchange market makers, the reformed market data infrastructure, IEX’s D-Limit order type, stress-testing of price improvement practices, and the feasibility of a common methodology for calculating damages in best execution class actions.

Keywords: off-exchange market makers, best execution, market data infrastructure, MiFID II, payment for order flow, price improvement

JEL Classification: G18, K22

Suggested Citation

Dolgopolov, Stanislav, Off-Exchange Market Makers and Their Best Execution Obligations: An Evolving Mixture of Market Reform, Regulatory Enforcement, and Litigation (August 26, 2021). NYU Journal of Law & Business, Vol. 17, No. 3, pp. 477-545, 2021, Available at SSRN: https://ssrn.com/abstract=3781668

Stanislav Dolgopolov (Contact Author)

Decimus Capital Markets, LLC ( email )

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