Reading a broker's order execution policy in fifteen minutes

[FXS London Scalper]

Regulated brokers are required to make an execution policy available. It's dull, but fifteen minutes reading it can explain a lot about fills.

What to look for:

• Execution venues: does the broker deal on its own account, pass orders to liquidity providers, or both?
• Execution factors and their priority: price, cost, speed, likelihood of execution.
• Slippage: is it applied symmetrically, positive as well as negative?
• Requotes and rejections: when do they happen?
• How pending orders are filled, especially stops and gaps.
• Conditions during news and abnormal markets.

Questions to note for support:

• Anything vague, such as "may at its discretion".
• Last look, if mentioned or not.

Compare the policy with your own fill data. If the policy says slippage is symmetric, your log should show positive slippage too. If it doesn't, that's a question with evidence behind it.

Save a copy with the date. Policies change.

It's also worth reading the section on how complaints are handled, and which ombudsman or authority you can turn to if a dispute about a fill can't be resolved with the broker directly.

Has anyone found something surprising in an execution policy?