Proof of Execution: Trading Agents and the Audit Problem
When a trading agent is examined, the decisive question is which prices it saw. Best execution, the duty to obtain the best available terms for a client, is the obligation most trading agents inherit the moment they route an order, and under MiFID II and SEC rules on order routing it is judged on outcomes rather than intentions. Regulators have made clear that best execution is something a firm demonstrates with data, not something it certifies with a policy.
The usual audit trail runs out at exactly this point, because a firm can log every order its agent sent and every fill it received, producing a complete record of what the agent did, while best execution turns on something that record does not contain: whether the prices the agent compared across venues were real and current at the instant it chose. An agent that routed to a venue on a stale or partial quote can produce an execution that looks optimal in its own record while having missed the actual best price. The log confirms the decision without confirming the market the decision was made against.
Proving best execution, then, means being able to show the market data the agent saw, not only the orders it sent. The evidence has to describe the inputs to the routing decision, and it has to be credible to a regulator who has no reason to trust the firm's own capture of those inputs.
Space and Time, the data blockchain securing onchain finance, returns market and onchain data with cryptographic proof that each value is the correct, untampered result of the query that fetched it. An execution built on that data carries evidence of the prices the agent faced, verifiable independently of the firm's logs. Best execution stops being a story the firm tells about its own trading and becomes something it can show.
