An Investment Dealer executes a client’s trade at a worse price than what was available...

The conduct most directly violates the dealer’s best-execution obligation. Best execution requires the Investment Dealer to pursue the most advantageous execution terms reasonably available under the circumstances. Price is a critical factor, although dealers may also consider speed, certainty of execution, liquidity, order size, transaction cost and the client’s instructions.

In this scenario, the dealer had access to another exchange displaying a better available price but executed the client’s order at an inferior price without an identified justification. CIRO guidance requires dealers to consider order and trade information from appropriate marketplaces and assess whether client orders could reasonably execute at a better price. Dealers must maintain written policies, supervisory controls and review procedures designed to achieve best execution.

Front running involves trading ahead of a known client order for personal or proprietary advantage. Wash trading involves transactions that create misleading activity without a genuine change in beneficial ownership. Insider trading involves trading while possessing material non-public information. None describes the marketplace-routing failure in the scenario.

The Retail Securities syllabus expressly tests best execution under the Execution and Market Integrity element, while CIRO guidance requires dealers to evaluate accessible marketplaces and monitor whether their routing processes produce advantageous client outcomes.

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