For Internal Cross Transactions, which condition must be fulfilled?

In the context of internal cross transactions, the requirement to act in the best interest of both parties involved is critical. This principle is rooted in the fiduciary responsibility that investment advisers have towards their clients. When brokers or advisers engage in internal cross transactions—where one client’s order is used to offset another client’s order—it's essential to ensure that both clients’ interests are preserved.

This involves transparency and an evaluation of the potential impact on each client’s portfolio, ensuring that neither client is disadvantaged by the transaction. The advisers must navigate these transactions carefully to maintain trust and regulatory compliance since both clients should benefit reasonably from the trade.

In contrast, other options like sharing trade summaries or charging higher fees do not address the core fiduciary duty involved in internal cross transactions. Moreover, committing trades without compliance checks directly undermines regulatory standards and could harm both clients involved. Thus, the emphasis on acting in the best interest of both parties aligns with ethical practices and regulatory frameworks governing investment advisers.