Due to be enforced in November 2007, this directive contains an important provision related to Best Execution.

The MiFID directive is establishing a very open and competitive market for execution and other investment services. The new requirement is for regulators to ensure that the development of new execution venues, systematic internalisation and the end of the concentration obligation (ie the obligation in certain Member States to route all negotiations through a central regulated market) will not result in less efficient or transparent markets that could harm the end investor.

Transaction Cost Analysis (TCA) is obviously very likely to form the cornerstone of any future academic and industry development related to this new Best Execution obligation. In this respect EDHEC Risk Advisory, sponsored by HSBC, have conducted a pan-European survey aiming at better understanding the current state of the industry when it comes to assessing transaction costs and the level of readiness in terms of complying with Article 21.

"Best Execution" is also a new research programme within the  EDHEC Risk & Asset Management Research Centre .