TabbFORUM Q&A: BXS’s Ben Calev on Rule 605, AI’s Role in Best Execution, and Trading Around the Clock

New rules surrounding best execution are set to go into effect this summer, but the need to demonstrate that client trades were executed in an optimal manner remains unchanged. TabbFORUM spoke with Ben Calev, Founder and Chief Strategy Officer at BXS, about preparing for the amended Rule 605, the growing importance of execution quality data and analytics, and why the move toward 24-hour trading may not have as significant an impact on best execution as many expect.

Why is best execution still a challenge for most firms, and why is it still so important?

Ben Calev: When I started in this little niche of the industry almost 26 years ago, best execution was a newer concept, but it was also a much simpler one. You didn’t have algorithmic routing, nearly as many execution venues, or the endless number of routing decisions that firms face today when determining where to send a customer order for execution. Things also happened in seconds, as opposed to nanoseconds and even finer increments today. Back then (and still today), there were the “regular and rigorous” rules, which essentially said firms had to do something to ensure their clients were receiving best execution. Then came the regulatory best execution rules, like Rule 11Ac1-5 (which later became Rule 605), basically saying: okay, now prove it.

Full Q&A below:

TabbFORUM Q&A with BXS Ben Calev