In 1975 Congress enacted legislation designed to foster the establishment of a national system for the trading of securities. Many of the goals of a national market cannot be achieved if brokers are not compelled to seek the best price when executing transactions in multiply traded securities. To date, the Securities and Exchange Commission has failed to adopt a rule either requiring or encouraging a best execution practice.
This article examines the importance of a best execution rule to investors, to the national market system and to the economy. It explores the changes that have evolved in the securities industry in the wake of the national market system legislation. Finaly, the article examines how these changes provide a strengthened argument for the implementation of a best execution rule.
David A. Lipton, Best Execution: The National Market System’s Missing Ingredient, 57 NOTRE DAME LAW. 449 (1982).