Best Execution refers to an investment service firm's obligation to execute orders on behalf of customers and to ensure that the prices those orders receive reflect the best mix of price improvement, speed and likelihood of execution. Brokers are obligated to send orders to venues with the optimal "best execution stats."
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Determine Compliance With Best Execution Requirements
To determine compliance, brokerage firms must evaluate customer orders and assess which competing markets, market makers, or electronic communications networks (ECNs) offer the best terms of execution. Ultimately, the decision on best execution is made by selecting preferences of market centers or counterparties who consistently meet or exceed certain benchmarks for quality.
Best Execution Reporting
Some company's, including Austin, TX based S3 Matching Technolgies  assist with Best Execution reporting for both equities and options.
In the case of S3, their reporting technology offers complete transparency into order flow management through a self-service interface. This results in trade reports that can be easily packaged and delivered over the Web. Client requests for information can be immediately answered. In the event of a disimproved trade, a missed fill, or any order that is executed outside of the customized business rules and standards, the technology's closed-loop system for managing orders and work-flow creates a ticketing system for resolving exceptions. Exceptions are reported to responsible traders and other stakeholders in the process in real time.
- Best Execution Reporting for Options. S3 Matching Technologies.