SD-06.2 — Trade Execution

Business Domain: BD-06 Trading & Execution (Front office) · Applies: PUB

Purpose

Executes the order in the market — the execution-management capability. Execution is mode-dependent: the market structure of the instrument dictates how it is traded. Equities and listed futures trade order-driven, against a central limit order book, executed by algorithm; fixed income and FX trade quote-driven, by request-for-quote to dealers; large, illiquid or sensitive orders are worked high-touch, by voice. SD-06.2 is one capability whose operations branch across those three modes, with no mode the default.

Service Operations

Select the execution strategy — choose the benchmark, the urgency and the execution mode for the order.
Execute order-driven — algorithm selection and parameterisation (VWAP, TWAP, participation, implementation-shortfall), smart order routing, and dark-pool and block execution; for equities and listed futures.
Execute quote-driven — counterparty selection, request-for-quote and request-for-market, streaming-price execution, and portfolio (list) trading; for fixed income and FX.
Execute high-touch — voice negotiation, block-trade working, capital-commitment requests, and indication-of-interest and axe discovery.
Monitor execution — track the order in real time against its strategy and intervene where needed.
Capture the execution record — record the fills, prices and timestamps.

Inputs and outputs

Inputs: the routed child orders (SD-06.1); market data; venue and broker connectivity; the algorithm suite; pre-trade analytics.
Outputs: the executions and fills, with their prices and timestamps — consumed by SD-06.4 (transaction cost analysis), SD-06.5 (allocation) and BD-12 (settlement).

Entities

Consumes: Instrument / Asset (E-02), Listed Equity (PB-01), Debt Instrument (PB-02), Price & Market Data (E-08); PB-03 Order (SD-06.1).
Owns: PB-04 Execution — the public-markets trade-lifecycle pack’s Execution entity. SD-06.2 is its authoritative source

Standards

The FIX protocol; MiFID II algorithmic-trading controls and trading-venue obligations. The CFA Institute treatment of execution strategy and the algorithm classes. No single standard spans the three execution modes — the operation set is the union.

Open extensions

The third level decomposes explicitly into the order-driven, quote-driven and voice modes; FX execution is explicitly within the quote-driven and streaming modes.
The boundary with SD-06.6 — SD-06.2 executes listed derivatives; SD-06.6 owns OTC-derivative execution and the clearing path.