Execution only

A legal status, not a description of service quality. The firm receives an instruction and carries it out, with the instrument, the direction and the size chosen without any recommendation from it. Such a firm describes what an instrument is and how a cost is calculated, and stops before the sentence that would tell somebody what to do with either. It monitors nobody's open positions.

The status comes from the permissions a regulator grants. Authorisation is specific rather than general: a licence to receive and transmit orders, and to execute them, is a different permission from advising on investments or managing them at discretion, and a firm holds each only if it is named on its licence. The obligations that come with the execution permission still apply in full, including client identification checks, categorising each client, holding client money apart from the firm's own, disclosing costs, and executing consistently under a published policy.

The distinction that gets blurred is between information and advice. Education, market commentary, research, calculators and screening tools are general and are directed at nobody in particular. Advice is a recommendation presented as suitable for one identified person, and it triggers a duty to assess whether it is. A managed account is a third thing again, in which discretion to deal is handed to the firm. Reading a definition of an instrument, on this page or any other, is not receiving a recommendation to deal in it.