What is the consequence if a client imposes a limit price far from the current market price?
The order will be executed immediately at market price
The provider will be deemed to have fulfilled its best execution obligation for that aspect
The order will be automatically cancelled
The client will have to pay additional fees
Categorize items by dragging them to the appropriate zones
Items to categorize:
Warn the client of the consequences of their specific instructions
Achieve the best possible result for the part of the order not covered by the instructions
Verify that the execution policy contains a clear warning
Ensure immediate execution if requested by the client
Categories:
Duty to warn
Best execution obligation
Under Article 27(1) of MiFID II, what is the essential condition for the provider to be deemed to have fulfilled its best execution obligation when the client gives specific instructions?
The client must be a professional investor
The client must have been warned of the consequences of their instructions
The order must be executed immediately
The order price must be close to the current market price
True or False: The professional does not need to identify the duty to warn if the client is a professional investor.
True
False
True or False: The duty to warn applies only when the specific instruction covers the entirety of the order.
True
False
Legal basis of the duty to warn
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In which situation does a client give a specific instruction on the execution venue?
Requesting immediate execution at market price
Imposing a limit price far from the current market price
Requesting that the order be executed exclusively on Euronext Paris
Requiring written confirmation before execution
According to Article 66(3)(f) of the Delegated Regulation, what must the execution policy contain regarding client specific instructions?
A summary of the provider's past performance
A clear warning about the consequences of specific instructions