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From Orders to Markets

11 Pages Posted: 10 Aug 2005  

Jonathan R. Macey

Yale Law School

Maureen O'Hara

Cornell University - Samuel Curtis Johnson Graduate School of Management

Abstract

Among the clearest rules in U.S. securities law is the duty that brokers have to "seek the best execution that is reasonably available for its customers' orders." The problem with the current orientation of the policy discussion on best execution is that it has focused on the narrow, yet unanswerable, question of which venue provides traders with "best execution." For example, it makes no sense to employ the same, or even a similar, legal definition of the duty of best execution for large institutional traders and for small retail traders. In this article, we examine the alternative institutions most likely to generate optimal rules regarding best execution.

Keywords: Brokers, best execution, traders, securities law

JEL Classification: D4, D8, G3, K2, K22, M1

Suggested Citation

Macey, Jonathan R. and O'Hara, Maureen, From Orders to Markets. Regulation, Vol. 28, No. 2, pp. 62-70, Summer 2005; Yale Law & Economics Research Paper No. 321. Available at SSRN: https://ssrn.com/abstract=774973

Jonathan R. Macey (Contact Author)

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
+203-432-7913 (Phone)
+203-4871 (Fax)

Maureen O'Hara

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States
607-255-3645 (Phone)
607-255-5993 (Fax)

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