KNOW BEST EXECUTION RULE FOR SERIES 66 EXAM

Taking the Series 66 exam? Then make sure that you are familiar with the "best execution rule."

Lets suppose that there are three market-makers in GKLM common shares. 

Dealer A quotes GKLM at 30.55 bid, 30.93 offer.

Dealer B quotes 30.61-30.98.

Dealer C quotes 30.45-30.89.

All three quotes are firm for up to 1,000 shares.

Widow Jones wishes to sell 500 shares of GKLM and puts in her order with her brokerage firm, DEF Co.

According to the best execution rule, DEF Co. should send Widow Jones' order to Dealer B. Why? Dealer B's bid is the highest bid for GKLM, and Widow Jones wants the highest dealer bid for her sale of 500 GKLM.

Our book Study for the Series 66 Exam covers the Best Execution Rule on page 156, including practice questions and examples.

Here is a link to NASAA's Test Specifications for the Series 66 exam. See III (J) (3) of the Series 66 Test Specifications for inclusion of the best execution rule.

Study for the Series 66 Exam is available from Amazon in either paperback or Kindle e-book versions. Here is a link to Bob Eder's Series 66 book on Amazon.

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law in 2001.


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