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Execution Quality

Consistently Delivering a High Standard

At KCG, achieving your trading objectives is paramount. We work together with our clients to understand their trade execution priorities. We employ quantitative trading models to maximize efficiency. Best execution is our goal. 

As our performance and reputation attest, we provide buy- and sell-side firms with consistent, high-quality trade executions.

Here’s how we’re doing. 

Trade Execution Statistics

Execution Speed

Speed is one of the facets of best execution.  We strive to provide competitive execution speed.

  August-16 September-16 October-16
All Listed 0.30 0.18 0.19
All NASDAQ 0.37 0.33 0.36
Listed S&P 500 0.1 0.1 0.11
NASDAQ 100 0.02 0.03 0.04

"Execution Speed" calculation in market orders of all sizes (100-9999 shares, in seconds). Data provided by RegOne Solutions.

Statistics apply to KCG Americas LLC (formerly Knight Capital Americas LLC)

Price Improvement

The opportunity to receive price improvement is another facet of best execution.  Our deep liquidity and execution prowess allows us to provide meaningful opportunities for price improvement.

  August-16 September-16 October-16
All Listed 90.47% 90.50% 90.23%
All NASDAQ 87.30% 86.57% 85.79%
Listed S&P 500 91.97% 91.37% 90.63%
NASDAQ 100 93.86% 91.58% 90.27%

"Price Improvement" percentage calculation in market orders of all sizes (100-9999 shares). Data provided by RegOne Solutions.

Statistics apply to KCG Americas LLC (formerly Knight Capital Americas LLC)

At-or-Better

Certainty of execution, at or better than the NBBO, is another facet of best execution. Again, our deep liquidity and execution prowess allows us to provide clients with a high probability that their orders will be executed at or better than the NBBO.

  August-16 September-16 October-16
All Listed 97.60% 97.80% 96.90%
All NASDAQ 95.80% 95.70% 94.10%
Listed S&P 500 97.90% 98.00% 96.90%
NASDAQ 100 98.10% 97.50% 96.00%

"At-or-Better" percentage calculation in market orders of all sizes (100- 9999 shares). Data provided by RegOne Solutions.

Statistics apply to KCG Americas LLC (formerly Knight Capital Americas LLC)

Anonymity

At KCG, we strive to protect the confidentiality of our clients’ orders and investment strategies. Your ability to move in and out of a stock without leaving a footprint helps to protect your investing strategies and limit the chance of information leakage.

Insight

Our traders understand market structure and the characteristics of the securities they trade.  This allows them to provide market insight and best-in-class service amid varied market conditions and cycles. 

Market Impact

Our deep liquidity and trading expertise helps us to minimize market impact when completing your trades. When supply and demand shift, we put our liquidity and trading experience to work reducing the effects of volatility and minimizing slippage.

Rule 605 and Rule 606 Reporting

KCG supports the development and implementation of rules and regulatory initiatives that produce more liquid and transparent markets. On November 17, 2000, the Securities and Exchange Commission (“SEC”) adopted two rules to improve public disclosure of execution and routing practices.

Exchange Act Rules 605 and Rule 606 were adopted to standardize and improve public disclosure of execution and routing practices. Pursuant to the SEC’s execution quality disclosure rule (Rule 605), monthly performance statistics can be obtained directly from the KCG website. Client-specific Rule 605 Execution Statistics can be obtained using our web-based client portal using a password-protected login.

Rule 605

Rule 605 requires “market centers” that trade national market system securities to make available standardized, monthly reports containing statistical information about “covered order” executions. Rule 605 is intended to promote visibility and competition in order execution quality, particularly with respect to execution price and speed. The rule requires, among other things, that the reports be prepared in an electronic format available for downloading from an Internet website that is free and readily accessible to the public. 

The disclosures required by Rule 605 do not encompass all of the factors that may be important to clients in evaluating the order routing practices of a broker-dealer.  In addition, any particular market center’s statistics will encompass varying types of orders routed by different broker-dealers on behalf of customers with a wide range of objectives.  Accordingly, the statistical information required by Rule 605 alone does not create a reliable basis to address whether any particular broker-dealer obtained the most favorable terms under the circumstances for customer orders.  

Supplemental Retail Execution Quality Statistics

KCG, in conjunction with the Financial Information Forum and other retail broker dealers and wholesalers, has been working on improving access to execution quality statistics for the retail community. In an effort to provide investors with more useful disclosures about order routing practices, FIF members have voluntarily agreed to provide statistics on retail execution quality. While many quantitative and qualitative factors go into determining routing decisions, the statistics are intended to provide some additional perspective on the execution quality provided to retail investors beyond the currently available Rule 605 and Rule 606 statistics. Click here for more information.

See monthly reports about our execution quality:

KCG AMERICAS LLC RULE 605 REPORTS (1) : November 2016 | October 2016 | September 2016 |

The files are updated every month on or around the 25th of each month, reflecting execution quality for trades reported for the previous calendar month end.  The download files are available in zip format, which contains an ASCII text file. The .zip files use WinZip technology to compress the files. To view these files you must have Winzip software.

(1) After the close of business on December 31, 2013, Knight Capital Americas LLC (“KCA”) merged with its affiliate OCTEG, LLC. KCA was the surviving legal entity in the merger. Immediately following the merger, KCA changed its name to KCG Americas LLC (“KCGA”). The information and data in this report is the combination of the Knight Capital Americas LLC’s 605 report and GETCO Execution services LLC’s report.

Additional information about the Rule 605 reports:

Disclaimer for SEC Rule 605

Rule 606

Rule 606 requires broker-dealers that route customer orders in equities and option securities to publish quarterly reports that provide a general overview of their routing practices. In this report, the venues to which non-directed customer orders in U.S. exchange-listed equity securities and options were routed for execution must be disclosed, as well as the nature of any relationship the broker-dealer has with each venue. The purpose of this report is to provide the public with information on how broker-dealers route orders, enable the evaluation of order routing practices and foster competition among market participants.  Upon request, broker-dealers also must disclose to customers the venues to which their individual orders were routed. Each customer may request a written copy of the report be mailed to them at no charge.

See quarterly reports of our routing practices:

KCG AMERICAS LLC / ROUTING OF CUSTOMER ORDERS RULE 606 REPORTS: Q3-2016 | Q2-2016 | Q1-2016

KCG AMERICAS LLC / ROUTING OF INSTITUTIONAL ORDERS RULE 606 REPORTS (1) : Q3-2015 | Q2-2015 | Q1-2015

KCG AMERICAS LLC / ALGORITHMS AND ROUTING – DTTX AND GFLO RULE 606 REPORTS (1) : Q3-2015 | Q2-2015 (Original 7/31/15) | Q2-2015 (Revised 10/30/15)

KCG AMERICAS LLC / KNIGHT DIRECT – DTTX RULE 606 REPORTS (1) : Q1-2015 | Q4-2014 | Q3-2014

KCG AMERICAS LLC / KNIGHT DIRECT – GFLO RULE 606 REPORTS (1) : Q1-2015 | Q4-2014 | Q3-2014

(1) The SEC has interpreted Rule 606 to allow a single firm to prepare two or more reports that correspond to functional differences in the firm's order routing practices, if the separate reports will provide a clearer picture of the firm's practices and the basis for the separate reports is fully disclosed to customers and the public. KCG has decided to prepare separate reports for certain businesses as KCG believes that separate reports will provide you with a clearer picture of our routing practices within each business. Generally, if you route your order to an Institutional Sales Trader at KCG Americas LLC, the report labeled Institutional Sales will give you an overview of our routing practices as it pertains to your order. Similarly, if you route your to KCG Algorithms, the Reports labeled Knight Direct – DTTX and Knight Direct – GFLO will give you an overview of our routing practices as it pertains to your order.

Disclosures and Material Relationships:

Knight Capital Holdings LLC ("KCH") is the parent company of KCA.  KCH has a direct ownership interest in Direct Edge Holdings LLC, the parent company of EDGX Exchange, Inc. ("EDGX") and EDGA Exchange, Inc. ("EDGA").

KCA operates an alternative trading system, KCG MatchIt, and is a market maker in OTC securities and securities listed on the following exchanges/venues: New York Stock Exchange ("NYSE"), NYSE Amex ("Amex"), NYSE Arca ("Arca"), NASDAQ OMX ("NASDAQ"), NASDAQ OMX PHLX ("PHLX"), BATS Exchange ("BATS"), Chicago Board Options Exchange ("CBOE") and International Securities Exchange ("ISE").

Both KCA and GES route orders to market centers, including national securities exchanges, alternative trading systems, electronic communications networks, and broker-dealers that may offer credits for orders that provide liquidity to (remove liquidity from) their books and assess fees for orders that take liquidity from (add liquidity to) their books. In some cases, the credits offered by a market center may exceed the charges assessed, such that a market center may make a payment to KCA in relation to orders directed to such market center.

“Other Order” include market opening and closing orders, orders submitted with stop prices, all-or-none orders and Not Held orders. Algorithmic and Smart Order Routing orders are considered Not Held.

Additional information about the Rule 606 reports:

Disclaimer for SEC Rule 606

Order Execution Statement – KCG Europe Limited

Quality of Execution

When executing orders in financial instruments on your behalf, KCG Europe Limited. We will take all reasonable steps to achieve the best possible result for executing those orders by following our Order Execution Policy in conjunction with your specific instructions. We take into account the nature of your orders, the priorities you have identified to us in relation to filling those orders and the practices relating to the market in question. Our aim is to produce results that provide, in our view, the best balance across a range of sometimes conflicting factors.

In each case where the relevant activities relate to “financial instruments” as defined in MiFID, we will be executing orders for you in the following circumstances:

  • Where we act as agent on your behalf in executing a transaction.
  • Where we are acting as principal but have a client relationship with you in relation to executing a transaction.

In instances where we transmit an order to a third party for execution, including to our affiliate entities, we will also have obligations to ensure that best execution is obtained for your orders.

If you provide us with specific instructions, including detailing the characteristics of a bespoke product, either relating to an order or a particular aspect of an order, we will execute the order in accordance with those instructions. This will mean that, in the context of this order or aspect, your instructions will supersede our Order Execution Policy.

For orders related to fixed income securities, we will solicit bids and offers from other clients and market counterparties in accordance with client instructions and execute orders as matched principal on an OTC basis. We will negotiate the terms of the trade with both parties and we will only execute your order on your acceptance of these negotiated terms.

Factors We Take into Consideration in Seeking to Deliver Best Execution

We will take into consideration a range of different factors which include not just price, but which may also include such other factors as the cost of the transaction, the need for timely execution, the liquidity of the relevant market (which may increase the difficulty to even execute an order), the size of the order and the nature of the financial transaction, including whether it is executed on a regulated market or over-the-counter.

The Basis on Which We Decide on Execution Venues

Our Order Execution Policy includes venues that will allow us to obtain, on a consistent basis, best execution for each order in a financial instrument which we execute on your behalf.

Those execution venues may include, as appropriate for each financial product, regulated markets, multilateral trading facilities, systematic internalisers, our own propriety trading desks and third party investment firms and/or affiliates acting as a market maker. The choice of execution venues is based on client demand, liquidity and displayed price.

To obtain best execution for you, where we have your consent to do so, we may execute orders on your behalf outside a regulated market or a multilateral trading facility.

In relation to some financial instruments, there may be only one possible execution venue. In executing an order on your behalf under such circumstances it will be assumed that we have achieved best execution.

We will take into account specific instructions that you have provided to us which may determine how we prioritise your order. We may also take into account your understanding and experience of the market in question, your dealing profile and the nature of the dealing service you require from us.

In the absence of express instructions from you, we will exercise our own discretion in determining the factors that we need to take into account for the purpose of providing you with best execution.

Our commitment to provide you with best execution does not create any fiduciary responsibilities over and above the specific regulatory obligations placed upon us or as may be otherwise contracted between us.

Finding liquidity and increasing the likelihood of execution are important for larger middlemarket and institutional orders. We may use our own capital to enhance liquidity in individual stocks to improve the speed and likelihood of execution. For the avoidance of doubt, use of capital is entirely at our discretion and is not guaranteed for any individual client, stock or trading situation. For smaller middle-market and broker-dealer orders, displayed liquidity on Regulated Markets and Multilateral Trading Facilities is typically available unless dealing in illiquid stocks.

Order-size will be a key determining factor on how to achieve best execution. Order-size and market impact are directly correlated, subject to the relative liquidity of the stock in question. Orders in larger size and/or less liquid stocks are likely to be worked over a period of time to reduce market impact. In normal circumstances, orders in smaller size and in liquid stocks will be executed as quickly as possible after receipt.

Price will always be important but not necessarily determinative in achieving the best outcome for the client. Price is a sub-set of other considerations such as timeliness, order size and market impact. Price assumes a higher priority for client orders where the transactions are low in size/value and have minimal market impact. Broker-dealer client orders will be executed as quickly as possible and where the best-available price is present. Institutional client orders will have less immediate emphasis on price and more on market impact. For example, by working the order, our emphasis will be minimising market impact to achieve the best possible outcome.

Monitoring the Effectiveness of our Order Execution Policy and its Regular Review

We will monitor the effectiveness of our order execution arrangements and Order Execution Policy. We will assess on a regular basis whether the execution venues included in our Order Execution Policy, and the brokers and dealers to whom we transmit orders, allow us to achieve best execution or whether we need to make changes to our execution arrangements. We will also review our order execution arrangements and Order Execution Policy regularly whenever a material change occurs either in respect of one of our chosen execution venues or otherwise impacts our ability to continue to achieve best execution. Should there be any material changes to our order execution arrangements or Order Execution Policy, those will be disclosed to you.

To view the Terms of Business, please click here.*

For further information on our services, please contact your KCG representative.

*Attached you can find the required PDF-file of the Terms of Business, which will appear when clicking on the hyperlink.

This Order Execution Statement refers to orders executed on behalf of clients of KCG Europe Limited only. KCG Europe Limited is Authorised and Regulated by the Financial Conduct Authority.