问题如下：
For several decades, XYZ Capital has been running enhanced index funds. These funds have low levels of target tracking error compared with their market-weighted benchmarks. The firm’s trade policy document has a focus on minimizing trading costs and defines best execution as follows:
“The firm takes all sufficient steps to obtain the best possible result in executing orders; that is, the firm makes its best attempt to achieve the best execution price and lowest trading cost possible for every transaction. In this way, the firm achieves best execution for its client portfolios.”
Discuss
whether the trade policy statement is in line with regulatory requirements and
client best interests.
解释：
Achieving the best execution price at the lowest trading cost possible is only part of the best execution effort. To ensure that clients and their portfolios are served in the best manner possible, other factors require consideration. These considerations include the speed of execution, the alignment of execution approach and execution horizon with the investment process, the likelihood of execution to be optimal, and so on. An exclusive focus on best execution price and lowest trading cost is too narrow a definition to achieve best client execution. For example, doing so could leave many trades unexecuted, which would result in increased opportunity costs from lost opportunities that could not be implemented.
