A news release from TradeTrek Securities said the buyback algorithm is designed to adhere to SEC Rule 10b-18 while minimizing market impact, reducing information leakage and obtaining optimal pricing.
To comply with best execution requirements, investors are adjusting their trade execution strategies and employing algorithmic – or rule-based – engines designed to electronically interact with the new market model.
Corporate buybacks are unique in that trades are subject to SEC Rule 10b-18 requirements which include timing, price and volume conditions. To insure 10b-18 compliance and get best available execution pricing, issuers will need to select a broker experienced in algorithmic order placement and electronic execution, according to the announcement.
More information is at www.algorithmtrading.com .