On 7 September 2020, the FICC Markets Standards Board (FMSB) published a Spotlight Review looking at the challenges in measuring quality of trade execution and how this varies across different market participants and segments.

The Spotlight Review is the fourth and final in a series that is collectively looking at issues of wholesale fixed income, currencies and commodities (FICC) market structure and the impact of regulatory and technological change on the fairness and effectiveness of wholesale markets.

While the various regulatory requirements for measuring execution quality vary by jurisdiction and asset class, wholesale FICC markets face specific challenges in achieving high standards of transparency, openness and fairness. This latest Spotlight Review explores the root cause of these challenges, highlights the progress made in regulation, and market participants’ practices with regard to data reporting and best execution, and sets out key points of focus for firms in navigating these difficult waters. It aims to create further discussion on this topic and its relevance to future standards work by FMSB. The Spotlight Review is intended to benefit front office trade execution on the buy-side as well as within market makers, and for those responsible for overseeing regulatory requirements in compliance and risk functions.