Great Document from CFA Institute on Trade Management (TCA) Guidelines

Just ran across a great document from the CFA providing guidelines for best execution from the CFA Institute.

To be sure these are guidelines – not standards. Looks like the mission of OpenTCA is still valid.

Still definitely worth a look; see the whole document online here.


The Guidelines are divided into three areas: (1) Processes, (2) Disclosures, and (3) Record Keeping.

1. Processes

Firms should establish written policies and procedures that have the ultimate goal of maximizing

the asset value of client portfolios through Best Execution while taking into account each client’s

investment objectives and constraints. A Firm’s policies and procedures should provide guidance

to manage effectively the quality of trade decisions.

2. Disclosures

Firms should disclose to current and prospective clients (1) their general information regarding

trading techniques, venues, and agents and (2) any actual or potential trading-related conflicts of

interest. This information provides clients with the necessary information to help them assess a

Firm’s ability to deliver Best Execution.

3. Record Keeping

Firms should maintain proper documentation that supports (1) compliance with its policies and

procedures and (2) the disclosures provided to clients. In addition to aiding in the determination of

Best Execution, the records may support a Firm’s Broker selection practices when examined by

applicable regulatory organizations.


Best Execution for Firms refers to a trading process Firms apply that seeks to maximize the value of a

client’s portfolio given each client’s stated investment objectives and constraints. This definition

recognizes that Best Execution:

• is intrinsically tied to portfolio-decision value and cannot be evaluated independently;

• is a prospective, statistical, and qualitative concept that cannot be known with certainty ex ante;

• has aspects that may be measured and analyzed over time on an ex post basis, even though such

measurement on a trade-by-trade basis may not be meaningful in isolation; and

• is interwoven into complicated, repetitive, and continuing practices and relationships.