Definition - What does Interpositioning mean?

Interpositioning is the placing of another broker dealer in between the customer and the best market. Interpositioning is prohibited, unless it can be demonstrated that the customer received a better price because of it.

Testopedia explains Interpositioning

When a customer gives an order to a broker dealer to buy or sell securities that broker dealer is obligated to try to exectute that order at the best possible price. A broker dealer may not accept a customer's order and then transmist that order to a second broker dealer to execute and have both broker dealers earn a fee for handling the order.

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