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Execution Venue

Where an order is actually executed — an outside market, a liquidity provider or the broker's own book — and why the execution policy must name it.

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An execution venue is where an order is actually executed, as opposed to where it is entered. Under European conduct rules the term covers regulated markets, multilateral and organised trading facilities, systematic internalisers, market makers and other liquidity providers. On a retail forex or CFD account the venue is most often the broker's own entity: it deals as principal against the client and manages the resulting exposure separately, so the order never reaches an exchange at all. A firm's order execution policy has to identify the venues it relies on, or the classes of venue, and explain how it chooses between them. That document is where you find out whether your order meets an outside market or your broker's own book, and it is the only public description of who ends up on the other side of your fill. What it cannot tell you is the price you will get: that depends on the liquidity available at the venue in the moment the order arrives.

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Guide

How Execution Models Work: ECN, STP and Market Maker

Market maker, STP and ECN describe where the other side of a trade comes from — and what each model changes about spreads, requotes and order handling.

Read the guide