# How Do Firms Evidence Best Execution without RTS 27 and RTS 28 Reports? ▴ Question

**Published:** 2025-08-05
**Categories:** Question

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## Concept

The operational challenge of evidencing [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) has entered a new phase. With the systematic dismantling of the RTS 27 and RTS 28 reporting frameworks, the regulatory apparatus has shifted its focus from standardized, often unread, public disclosures to the internal, systemic integrity of a firm’s execution architecture. This evolution demands a fundamental recalibration in how an institution conceives of and demonstrates its fulfillment of its fiduciary duties.

The absence of these reports removes a procedural checklist, replacing it with a mandate for a more profound, evidence-based articulation of [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). Your firm’s internal data, governance protocols, and analytical capabilities are now the primary exhibits in demonstrating compliance and strategic superiority.

The core of this new paradigm is the recognition that best execution is an outcome of a well-architected system, a dynamic process of continuous evaluation and optimization. It is a demonstrable proof of process. The obligation was never truly about the reports themselves; they were merely a flawed instrument of verification.

The true obligation, which persists and is now under greater scrutiny, is the continuous and rigorous process of ensuring client orders are handled with the highest degree of diligence, intelligence, and integrity. Evidencing this requires a move beyond static, historical reporting toward a living, auditable framework that combines qualitative judgment with empirical, quantitative validation.

> The dissolution of RTS 27 and RTS 28 shifts the burden of proof for best execution from standardized public reports to the firm’s own internal, dynamic, and data-rich operational framework.

![A transparent, precisely engineered optical array rests upon a reflective dark surface, symbolizing high-fidelity execution within a Prime RFQ. Beige conduits represent latency-optimized data pipelines facilitating RFQ protocols for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-architecture.jpg)

## From Prescribed Reports to Systemic Proof

The transition away from RTS 27 and RTS 28 reporting is an acknowledgment by regulators that true execution quality cannot be adequately captured in standardized tables that lack comparative context. The evidence showed that these reports were cumbersome to produce and rarely used by investors to make informed decisions. Consequently, the responsibility now rests squarely on the firm to construct a narrative of best execution that is both comprehensive and defensible. This narrative must be woven from the data generated by your own trading systems, the logic encoded in your execution policies, and the documented oversight of your governance bodies.

This requires a systemic view where every component of the trading lifecycle contributes to the final evidentiary file. The choice of an [execution venue](https://prime.greeks.live/area/execution-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the parameters of an algorithm, the routing logic for an order, and the post-trade analysis of its cost ▴ all become data points in a larger mosaic of proof. The focus is on demonstrating that the firm has taken all sufficient steps to obtain the best possible result for its clients, considering a range of [execution factors](https://prime.greeks.live/area/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) including price, costs, speed, likelihood of execution, and size.

![An institutional-grade platform's RFQ protocol interface, with a price discovery engine and precision guides, enables high-fidelity execution for digital asset derivatives. Integrated controls optimize market microstructure and liquidity aggregation within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/proprietary-institutional-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-granular-market-microstructure-analysis-for-prime-os.jpg)

## What Is the New Evidentiary Standard?

The new standard is one of demonstrable diligence. It requires firms to articulate why specific execution strategies were chosen and to back up those decisions with data. This means your [Best Execution Policy](https://prime.greeks.live/area/best-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a critical, living document that outlines the architecture of your decision-making process.

It must be a detailed playbook that explains how you evaluate execution venues, how you select brokers, and how you use different order types and algorithms to achieve specific outcomes for different types of financial instruments and client orders. The evidence of best execution becomes the documented output of this policy in action ▴ the [pre-trade analysis](https://prime.greeks.live/area/pre-trade-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the real-time monitoring data, and the [post-trade transaction cost analysis](https://prime.greeks.live/area/post-trade-transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) that validates the chosen strategy.

![Intersecting opaque and luminous teal structures symbolize converging RFQ protocols for multi-leg spread execution. Surface droplets denote market microstructure granularity and slippage](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-digital-asset-derivatives-high-fidelity-execution.jpg)

![A futuristic, metallic structure with reflective surfaces and a central optical mechanism, symbolizing a robust Prime RFQ for institutional digital asset derivatives. It enables high-fidelity execution of RFQ protocols, optimizing price discovery and liquidity aggregation across diverse liquidity pools with minimal slippage](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-platform-for-institutional-digital-asset-derivatives-rfq-protocol-optimized-execution-management-system-with-robust-liquidity-sourcing.jpg)

## Strategy

In a market structure devoid of the RTS 27 and RTS 28 reporting mandates, a firm’s strategy for evidencing best execution must pivot from reactive compliance to proactive demonstration. The strategic objective is to build an internal system of record that is so robust, transparent, and analytically sound that it makes the absence of the old reports irrelevant. This system becomes the definitive source of truth for regulators, clients, and internal oversight committees. The strategy is built on two pillars ▴ a qualitative framework that governs decision-making and a quantitative framework that measures the outcomes.

![A sleek, cream-colored, dome-shaped object with a dark, central, blue-illuminated aperture, resting on a reflective surface against a black background. This represents a cutting-edge Crypto Derivatives OS, facilitating high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-prime-os-high-fidelity-rfq-execution-engine-intelligence-layer.jpg)

## The Qualitative Framework Governance and Policy

The qualitative aspect of the strategy centers on creating and maintaining a comprehensive and dynamic Best [Execution Policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This policy is the constitution of your execution process. It must clearly articulate the methodologies for venue and broker selection, the management of conflicts of interest, and the governance structure for oversight. The strategy involves treating this policy as an active risk management tool.

A key component of this strategy is the formalization of the venue selection and review process. Firms must be able to provide a clear rationale for why they connect to certain liquidity pools and not others. This involves a documented analysis of each venue against a consistent set of criteria.

This process must be repeated at regular intervals, at least annually, and any changes to the venue list must be justified and recorded. The goal is to create a clear audit trail that shows a thoughtful and deliberate approach to accessing liquidity.

- **Define The Execution Policy** This document must be the central pillar of the strategy. It needs to detail the firm’s approach to achieving best execution across different asset classes and client types. It should specify the execution factors the firm considers (price, cost, speed, etc.) and how they are prioritized in different scenarios.

- **Establish A [Governance Committee](https://prime.greeks.live/area/governance-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)** An internal [Best Execution Committee](https://prime.greeks.live/area/best-execution-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) or a similar governance body is a strategic necessity. This committee should be composed of senior staff from trading, compliance, risk, and technology. Its mandate is to review execution quality reports, oversee the venue selection process, and approve any material changes to the Best Execution Policy. The minutes of these meetings are a critical piece of evidence.

- **Systematic Venue And Broker Analysis** The strategy requires a structured and repeatable process for evaluating all entities responsible for executing orders. This involves due diligence and ongoing monitoring of their performance, financial stability, and adherence to regulatory standards. This analysis provides the justification for the top [execution venues](https://prime.greeks.live/area/execution-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) that were previously disclosed in RTS 28 reports.

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## The Quantitative Framework Measurement and Analysis

The quantitative pillar of the strategy is anchored in robust [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) ([TCA](https://prime.greeks.live/area/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)). While RTS reports provided a high-level, aggregated view, modern TCA offers granular, trade-by-trade analysis that provides a much richer and more meaningful picture of execution quality. The strategy is to embed TCA into the entire trading workflow, from pre-trade analysis to post-trade reporting.

> A successful strategy integrates a qualitative governance framework with a quantitative measurement system, using robust TCA to validate the decisions outlined in the Best Execution Policy.

Pre-trade TCA models can be used to estimate the expected cost and risk of different execution strategies, helping traders make more informed decisions. Real-time TCA can monitor orders as they are being worked, allowing for course corrections if market conditions change. Post-trade TCA is the critical component for evidencing best execution, as it provides the empirical data to assess whether the chosen strategy was effective. The strategy must involve the systematic capture and analysis of this data to identify trends, outliers, and areas for improvement.

![A sleek, disc-shaped system, with concentric rings and a central dome, visually represents an advanced Principal's operational framework. It integrates RFQ protocols for institutional digital asset derivatives, facilitating liquidity aggregation, high-fidelity execution, and real-time risk management](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-engine-digital-asset-derivatives-execution.jpg)

## How Does Tca Replace Rts Reporting?

TCA provides a more nuanced and insightful view of execution performance than the old reporting regime ever could. Instead of simply listing the top five venues, a firm can now use TCA data to show why certain venues were chosen for specific types of orders and demonstrate that those choices led to superior results. For example, a firm can show that for large, illiquid orders, it routed to a specific dark pool or used a block trading RFQ protocol to minimize market impact, and it can present the TCA data (such as [implementation shortfall](https://prime.greeks.live/area/implementation-shortfall/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)) to prove the effectiveness of that decision.

The following table illustrates how different execution venues might be evaluated based on a set of qualitative and quantitative factors, forming a core part of the strategic analysis that underpins the Best Execution Policy.

### Table 1 ▴ Execution Venue Strategic Analysis Matrix

| Execution Venue Type | Primary Liquidity Profile | Key Quantitative Factors | Key Qualitative Factors | Optimal Use Case |
| --- | --- | --- | --- | --- |
| Lit Exchange | Continuous, transparent order book | Low explicit costs (fees), high fill rates for small orders, fast execution speed. | High transparency, regulatory oversight, price discovery function. | Small-to-medium sized, liquid orders where speed and certainty of execution are primary. |
| Dark Pool / MTF | Non-displayed, block liquidity | Low price impact (slippage), potential for price improvement vs. lit market. | Reduced information leakage, potential for adverse selection, venue toxicity analysis required. | Large orders in liquid stocks where minimizing market impact is the primary goal. |
| Systematic Internaliser (SI) | Principal liquidity from a single dealer | No explicit exchange fees, potential for tight spreads. | Counterparty risk, potential for conflicts of interest, limited competition. | Retail and small institutional orders where cost certainty is a high priority. |
| Request for Quote (RFQ) | Targeted, bilateral liquidity | Competitive pricing from multiple dealers, ability to transfer risk. | Discreet execution, suitable for complex or illiquid instruments (e.g. options spreads). | Large block trades, derivatives, and illiquid assets requiring specialized liquidity. |

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## Execution

Executing a strategy to evidence best execution without RTS 27 and RTS 28 requires a disciplined, technology-driven, and procedurally sound operational framework. The focus shifts from producing a report to building a continuous, auditable process. This process must generate a comprehensive evidentiary file for each trading period, capable of satisfying regulatory inquiry and demonstrating a systematic approach to achieving the best possible client outcomes. The execution phase is about instrumenting the firm’s trading infrastructure to capture the right data and implementing governance workflows to analyze it effectively.

![Intersecting concrete structures symbolize the robust Market Microstructure underpinning Institutional Grade Digital Asset Derivatives. Dynamic spheres represent Liquidity Pools and Implied Volatility](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-framework-optimizing-rfq-execution-and-liquidity-for-principal-trading.jpg)

## The Operational Playbook for Building the Evidence File

The creation of a defensible [best execution evidence](https://prime.greeks.live/area/best-execution-evidence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) file is a cyclical process involving policy setting, pre-trade analysis, real-time monitoring, post-trade analysis, and governance oversight. This playbook outlines the critical steps to operationalize the strategy.

- **Policy Codification** The Best Execution Policy must be translated into the firm’s Order Management System (OMS) and Execution Management System (EMS) settings. This includes configuring [smart order router](https://prime.greeks.live/area/smart-order-router/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SOR) logic, default algorithmic strategies for different order types, and venue routing tables. The system’s configuration itself becomes a piece of evidence.

- **Pre-Trade Documentation** For significant orders, particularly those requiring manual handling or block trading protocols like RFQ, traders must document their pre-trade analysis. This should include the rationale for the chosen strategy, the expected market impact, and the specific execution factors being prioritized. This can be logged directly within the EMS.

- **Systematic Data Capture** The firm’s technology stack must be configured to capture a rich set of time-stamped data for every order. This includes the time the order was received, routed, acknowledged by the venue, executed, and filled. It must also capture all relevant parent and child order details, venue IDs, and execution prices.

- **Post-Trade TCA Generation** On a daily or weekly basis, the captured trade data must be fed into a TCA system. This system should generate a standardized set of reports that analyze execution performance against various benchmarks (e.g. Arrival Price, [VWAP](https://prime.greeks.live/area/vwap/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), TWAP). These reports must be stored and archived for regulatory review.

- **Quarterly Governance Review** The Best Execution Committee must meet quarterly to review the TCA reports. The committee’s role is to identify any systematic underperformance, question outlier trades, review the effectiveness of algorithmic strategies, and assess the performance of execution venues. The meeting minutes, action items, and follow-up analysis form a critical part of the evidentiary file.

![Intersecting digital architecture with glowing conduits symbolizes Principal's operational framework. An RFQ engine ensures high-fidelity execution of Institutional Digital Asset Derivatives, facilitating block trades, multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/principal-digital-asset-derivatives-rfq-engine-high-fidelity-execution.jpg)

## Quantitative Modeling and Data Analysis

The core of the execution process is the rigorous analysis of quantitative data. Firms must move beyond simple metrics and adopt a sophisticated approach to TCA that can tell a clear story about execution quality. This involves comparing execution costs against multiple benchmarks to provide a complete picture. For instance, comparing against the Arrival Price (implementation shortfall) measures the full cost of an order, while comparing against VWAP measures performance relative to the market’s average price during the execution period.

> The evidentiary power of the new best execution framework lies in the ability to link documented strategic decisions to granular, quantitative outcomes measured by TCA.

The following table provides a sample TCA report for a set of hypothetical equity trades. This type of report is a cornerstone of the evidence file, allowing the firm to demonstrate its ability to measure and manage execution costs effectively. The analysis would involve drilling down into the outliers (like Trade 4) to understand the cause of the high slippage and document the findings.

### Table 2 ▴ Sample Post-Trade Transaction Cost Analysis Report

| Trade ID | Instrument | Side | Quantity | Strategy Used | Arrival Price (€) | Avg. Exec Price (€) | VWAP (€) | Slippage vs Arrival (bps) | Slippage vs VWAP (bps) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| T001 | Stock ABC | Buy | 50,000 | VWAP Algo | 100.05 | 100.10 | 100.12 | -5.00 | +2.00 |
| T002 | Stock XYZ | Sell | 10,000 | SOR (Lit) | 55.20 | 55.18 | 55.15 | +3.62 | -5.44 |
| T003 | Stock ABC | Buy | 200,000 | Dark Aggregator | 100.25 | 100.28 | 100.35 | -2.99 | +6.98 |
| T004 | Stock QRS | Buy | 5,000 | Market Order | 210.50 | 210.95 | 210.60 | -21.38 | -16.63 |
| T005 | Stock XYZ | Sell | 150,000 | RFQ | 54.90 | 54.89 | 54.85 | +1.82 | -7.29 |

![Intersecting abstract geometric planes depict institutional grade RFQ protocols and market microstructure. Speckled surfaces reflect complex order book dynamics and implied volatility, while smooth planes represent high-fidelity execution channels and private quotation systems for digital asset derivatives within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-protocols-digital-asset-microstructure-execution.jpg)

## How Do You Document Qualitative Factors?

Documenting the “softer” execution factors is a critical part of the process. This involves creating structured, evidence-based assessments. For example, the likelihood of execution for a venue can be quantified by tracking order fill rates and cancellation rates. Speed can be measured by analyzing latency from order routing to execution confirmation.

These quantitative metrics are then used to support the qualitative assessment in the venue analysis process. The output of this analysis, often in the form of a scorecard, should be reviewed and signed off by the Best Execution Committee, creating another formal piece of evidence that demonstrates a diligent and structured approach.

![Luminous blue drops on geometric planes depict institutional Digital Asset Derivatives trading. Large spheres represent atomic settlement of block trades and aggregated inquiries, while smaller droplets signify granular market microstructure data](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-derivatives-rfq-protocols-driving-high-fidelity-execution-and-optimal-liquidity-discovery.jpg)

## References

- European Securities and Markets Authority. “ESMA clarifies certain best execution reporting requirements under MiFID II.” ESMA, 13 Feb. 2024.

- Malta Financial Services Authority. “The European Securities and Markets Authority (“ESMA”) Clarifies Certain Best Execution Reporting Requirements under MiFID II.” MFSA, 19 Feb. 2024.

- Optiver. “A better way to measure best execution.” Optiver Insights, 8 Nov. 2021.

- SALVUS Funds. “Best Execution in Practice and the new RTS 27/28 requirements.” SALVUS, 24 Oct. 2024.

- Financial Conduct Authority. “Markets in Financial Instruments Directive II.” FCA, 2023.

![Internal hard drive mechanics, with a read/write head poised over a data platter, symbolize the precise, low-latency execution and high-fidelity data access vital for institutional digital asset derivatives. This embodies a Principal OS architecture supporting robust RFQ protocols, enabling atomic settlement and optimized liquidity aggregation within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-precision-execution-system-microstructure.jpg)

## Reflection

The removal of a prescriptive reporting standard invites a period of introspection. It compels a firm to look inward at its own operational architecture and ask fundamental questions. Is your execution framework merely a collection of technologies and processes, or is it an integrated system capable of learning, adapting, and proving its own value?

The data required to demonstrate best execution already resides within your systems. The challenge is to architect the workflows, analytics, and governance protocols that can transform that raw data into a coherent and compelling narrative of diligence and performance.

Consider the resilience of your current framework. How would it perform under the scrutiny of a detailed regulatory examination? Can you, at a moment’s notice, retrieve the full lifecycle of any given order and articulate the rationale behind its handling?

The capacity to answer these questions with data-backed confidence is the new benchmark for excellence. This evolution represents an opportunity to build a more intelligent and effective execution system ▴ one that generates superior client outcomes and evidences its own integrity as an intrinsic function of its design.

![A precision-engineered metallic cross-structure, embodying an RFQ engine's market microstructure, showcases diverse elements. One granular arm signifies aggregated liquidity pools and latent liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-microstructure-for-atomic-settlement.jpg)

## Glossary

<a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-faceted geometric object with varied reflective surfaces rests on a dark, curved base. It embodies complex RFQ protocols and deep liquidity pool dynamics, representing advanced market microstructure for precise price discovery and high-fidelity execution of institutional digital asset derivatives, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/multi-faceted-institutional-digital-asset-derivatives-execution-infrastructure.jpg)

## Best Execution

Meaning ▴ Best Execution is the obligation to obtain the most favorable terms reasonably available for a client's order. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A smooth, off-white sphere rests within a meticulously engineered digital asset derivatives RFQ platform, featuring distinct teal and dark blue metallic components. This sophisticated market microstructure enables private quotation, high-fidelity execution, and optimized price discovery for institutional block trades, ensuring capital efficiency and best execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-microstructure-core.jpg)

## Execution Quality

Meaning ▴ Execution Quality quantifies the efficacy of an order's fill, assessing how closely the achieved trade price aligns with the prevailing market price at submission, alongside consideration for speed, cost, and market impact. </a><a href="https://prime.greeks.live/area/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered control mechanism, featuring a ribbed dial and prominent green indicator, signifies Institutional Grade Digital Asset Derivatives RFQ Protocol optimization. This represents High-Fidelity Execution, Price Discovery, and Volatility Surface calibration for Algorithmic Trading](https://options.greeks.live/wp-content/uploads/2025/07/principal-operational-framework-precision-calibration-for-institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-prime-os-and-volatility-surface-optimization.jpg)

## Execution Factors

Meaning ▴ Execution Factors are the quantifiable, dynamic variables that directly influence the outcome and quality of a trade execution within institutional digital asset markets. </a><a href="https://prime.greeks.live/area/execution-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract layers in grey, mint green, and deep blue visualize a Principal's operational framework for institutional digital asset derivatives. The textured grey signifies market microstructure, while the mint green layer with precise slots represents RFQ protocol parameters, enabling high-fidelity execution, private quotation, capital efficiency, and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-layered-rfq-protocol-for-digital-asset-execution-system.jpg)

## Execution Venue

Meaning ▴ An Execution Venue refers to a regulated facility or system where financial instruments are traded, encompassing entities such as regulated markets, multilateral trading facilities (MTFs), organized trading facilities (OTFs), and systematic internalizers. </a><a href="https://prime.greeks.live/area/best-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision instrument with multi-layered dial, symbolizing price discovery and volatility surface calibration. Its metallic arm signifies an algorithmic trading engine, enabling high-fidelity execution for RFQ block trades, minimizing slippage within an institutional Prime RFQ for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-platform-calibrating-rfq-protocols-for-high-fidelity-execution-and-market-microstructure-optimization.jpg)

## Best Execution Policy

Meaning ▴ The Best Execution Policy defines the obligation for a broker-dealer or trading firm to execute client orders on terms most favorable to the client. </a><a href="https://prime.greeks.live/area/post-trade-transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated dark-hued institutional-grade digital asset derivatives platform interface, featuring a glowing aperture symbolizing active RFQ price discovery and high-fidelity execution. The integrated intelligence layer facilitates atomic settlement and multi-leg spread processing, optimizing market microstructure for prime brokerage operations and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-rfq-engine-intelligence-layer.jpg)

## Post-Trade Transaction Cost Analysis

Meaning ▴ Post-Trade Transaction Cost Analysis quantifies the implicit and explicit costs incurred during the execution of a trade, providing a forensic examination of performance after an order has been completed. </a><a href="https://prime.greeks.live/area/pre-trade-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central engineered mechanism, resembling a Prime RFQ hub, anchors four precision arms. This symbolizes multi-leg spread execution and liquidity pool aggregation for RFQ protocols, enabling high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-framework-enabling-multi-leg-spread-strategies-for-optimized-liquidity.jpg)

## Pre-Trade Analysis

Meaning ▴ Pre-Trade Analysis is the systematic computational evaluation of market conditions, liquidity profiles, and anticipated transaction costs prior to the submission of an order. </a><a href="https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, metallic multi-lens device with glowing blue apertures symbolizes an advanced RFQ protocol engine. Its precision optics enable real-time market microstructure analysis and high-fidelity execution, facilitating automated price discovery and aggregated inquiry within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-engine-intelligence-layer.jpg)

## Execution Policy

Meaning ▴ An Execution Policy defines a structured set of rules and computational logic governing the handling and execution of financial orders within a trading system. </a><a href="https://prime.greeks.live/area/best-execution-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, spherical white and blue module featuring a central black aperture and teal lens, representing the core Intelligence Layer for Institutional Trading in Digital Asset Derivatives. It visualizes High-Fidelity Execution within an RFQ protocol, enabling precise Price Discovery and optimizing the Principal's Operational Framework for Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/07/precision-lens-for-institutional-digital-asset-derivatives-rfq-execution.jpg)

## Best Execution Committee

Meaning ▴ The Best Execution Committee functions as a formal governance body within an institutional trading framework, specifically mandated to define, implement, and continuously monitor policies and procedures ensuring optimal trade execution across all asset classes, including institutional digital asset derivatives. </a><a href="https://prime.greeks.live/area/governance-committee/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Institutional-grade infrastructure supports a translucent circular interface, displaying real-time market microstructure for digital asset derivatives price discovery. Geometric forms symbolize precise RFQ protocol execution, enabling high-fidelity multi-leg spread trading, optimizing capital efficiency and mitigating systemic risk](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-request-for-quote-protocol-high-fidelity-execution-market-microstructure-intelligence-layer.jpg)

## Governance Committee

Meaning ▴ A Governance Committee constitutes a formalized, executive body within an institutional framework, specifically tasked with establishing and overseeing the strategic and operational parameters that govern an entity's engagement with digital asset derivatives and their underlying infrastructure. </a><a href="https://prime.greeks.live/area/execution-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A robust, multi-layered institutional Prime RFQ, depicted by the sphere, extends a precise platform for private quotation of digital asset derivatives. A reflective sphere symbolizes high-fidelity execution of a block trade, driven by algorithmic trading for optimal liquidity aggregation within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/robust-institutional-platform-for-digital-asset-derivatives-rfq-protocols-and-optimized-liquidity-aggregation.jpg)

## Execution Venues

Meaning ▴ Execution Venues are regulated marketplaces or bilateral platforms where financial instruments are traded and orders are matched, encompassing exchanges, multilateral trading facilities, organized trading facilities, and over-the-counter desks. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark, reflective surface displays a luminous green line, symbolizing a high-fidelity RFQ protocol channel within a Crypto Derivatives OS. This signifies precise price discovery for digital asset derivatives, ensuring atomic settlement and optimizing portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-pathway-optimizing-principal-liquidity-and-capital-efficiency.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA) is the quantitative methodology for assessing the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A glossy, segmented sphere with a luminous blue 'X' core represents a Principal's Prime RFQ. It highlights multi-dealer RFQ protocols, high-fidelity execution, and atomic settlement for institutional digital asset derivatives, signifying unified liquidity pools, market microstructure, and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-core-for-best-rfq-digital-asset-derivatives-institutional-trade-flow.jpg)

## Tca

Meaning ▴ Transaction Cost Analysis (TCA) represents a quantitative methodology designed to evaluate the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/implementation-shortfall/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A deconstructed mechanical system with segmented components, revealing intricate gears and polished shafts, symbolizing the transparent, modular architecture of an institutional digital asset derivatives trading platform. This illustrates multi-leg spread execution, RFQ protocols, and atomic settlement processes](https://options.greeks.live/wp-content/uploads/2025/07/deconstructed-principal-trading-system-revealing-core-mechanics-of-digital-asset-derivatives-execution.jpg)

## Implementation Shortfall

Meaning ▴ Implementation Shortfall quantifies the total cost incurred from the moment a trading decision is made to the final execution of the order. </a><a href="https://prime.greeks.live/area/best-execution-evidence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A modular institutional trading interface displays a precision trackball and granular controls on a teal execution module. Parallel surfaces symbolize layered market microstructure within a Principal's operational framework, enabling high-fidelity execution for digital asset derivatives via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-institutional-digital-asset-derivatives-rfq-protocol-controls.jpg)

## Best Execution Evidence

Meaning ▴ Best Execution Evidence constitutes the comprehensive, verifiable dataset and analytical framework demonstrating that an order was executed on terms most favorable to the client under prevailing market conditions, in accordance with an established execution policy. </a><a href="https://prime.greeks.live/area/smart-order-router/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Robust metallic beam depicts institutional digital asset derivatives execution platform. Two spherical RFQ protocol nodes, one engaged, one dislodged, symbolize high-fidelity execution, dynamic price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-prime-os-node.jpg)

## Smart Order Router

Meaning ▴ A Smart Order Router (SOR) is an algorithmic trading mechanism designed to optimize order execution by intelligently routing trade instructions across multiple liquidity venues. </a><a href="https://prime.greeks.live/area/vwap/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract geometric structure with sharp angles and translucent planes, symbolizing institutional digital asset derivatives market microstructure. The central point signifies a core RFQ protocol engine, enabling precise price discovery and liquidity aggregation for multi-leg options strategies, crucial for high-fidelity execution and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principals-operational-framework-optimizing-institutional-digital-asset-derivatives-rfq-protocol-execution-for-alpha-generation.jpg)

## Vwap

Meaning ▴ VWAP, or Volume-Weighted Average Price, is a transaction cost analysis benchmark representing the average price of a security over a specified time horizon, weighted by the volume traded at each price point. </a>

**Tags:** [Smart Order Router](https://options.greeks.live/area/smart-order-router/), [Execution Venue](https://options.greeks.live/area/execution-venue/), [Best Execution Committee](https://options.greeks.live/area/best-execution-committee/), [Regulatory Reporting](https://options.greeks.live/area/regulatory-reporting/), [Execution Quality](https://options.greeks.live/area/execution-quality/), [Best Execution Policy](https://options.greeks.live/area/best-execution-policy/)	

## Discover More

- 
### [How Can a Firm Quantitatively Demonstrate the Effectiveness of Its Order Execution Policy to Regulators?](https://options.greeks.live/question/how-can-a-firm-quantitatively-demonstrate-the-effectiveness-of-its-order-execution-policy-to-regulators/)
![A slender metallic probe extends between two curved surfaces. This abstractly illustrates high-fidelity execution for institutional digital asset derivatives, driving price discovery within market microstructure. It represents Prime RFQ protocol precision navigating dark liquidity for best execution and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/precision-instrument-navigating-institutional-digital-asset-derivatives-rfq-protocols-for-optimal-price-discovery-and-high-fidelity-execution.jpg)

A firm proves its execution policy's effectiveness via a data-driven framework of Transaction Cost Analysis against selected benchmarks.

- 
### [How Does MiFID II Define Best Execution for Smart Order Routers?](https://options.greeks.live/question/how-does-mifid-ii-define-best-execution-for-smart-order-routers/)
![A sleek, metallic, X-shaped object with a central circular core floats above mountains at dusk. It signifies an institutional-grade Prime RFQ for digital asset derivatives, enabling high-fidelity execution via RFQ protocols, optimizing price discovery and capital efficiency across dark pools for best execution.](https://options.greeks.live/wp-content/uploads/2025/07/advanced-principal-rfq-protocol-architecture-for-institutional-digital-asset-derivatives-optimal-price-discovery-and-execution.jpg)

MiFID II requires SORs to systematically process multiple execution factors to demonstrably achieve the best possible client result.

- 
### [How Do Firms Now Demonstrate Best Execution without RTS 27 Reports?](https://options.greeks.live/question/how-do-firms-now-demonstrate-best-execution-without-rts-27-reports/)
![A gleaming, translucent sphere with intricate internal mechanisms, flanked by precision metallic probes, symbolizes a sophisticated Principal's RFQ engine. This represents the atomic settlement of multi-leg spread strategies, enabling high-fidelity execution and robust price discovery within institutional digital asset derivatives markets, minimizing latency and slippage for optimal alpha generation and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/inst-digital-asset-deriv-rfq-os-for-optimal-high-fidelity-trade-exec.jpg)

Firms now prove best execution through a continuous, internal framework of data-driven analysis, rigorous governance, and adaptive technological systems.

- 
### [How Does Market Fragmentation Affect Best Execution Obligations for Asset Managers?](https://options.greeks.live/question/how-does-market-fragmentation-affect-best-execution-obligations-for-asset-managers/)
![Sleek, modular infrastructure for institutional digital asset derivatives trading. Its intersecting elements symbolize integrated RFQ protocols, facilitating high-fidelity execution and precise price discovery across complex multi-leg spreads. This represents a Prime RFQ intelligence layer for optimal capital efficiency and reduced slippage in volatile markets.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-optimizing-high-fidelity-block-trade-liquidity-and-multi-leg-spread-precision.jpg)

Market fragmentation mandates an asset manager to engineer a dynamic execution system that transforms dispersed liquidity into a verifiable edge.

- 
### [How Can Transaction Cost Analysis Be Used to Improve a Firm’s Best Execution Policies?](https://options.greeks.live/question/how-can-transaction-cost-analysis-be-used-to-improve-a-firms-best-execution-policies/)
![A central processing core with intersecting, transparent structures revealing intricate internal components and blue data flows. This symbolizes an institutional digital asset derivatives platform's Prime RFQ, orchestrating high-fidelity execution, managing aggregated RFQ inquiries, and ensuring atomic settlement within dynamic market microstructure, optimizing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-system-facilitating-high-fidelity-rfq-protocol-optimization-for-best-execution-and-atomic-settlement.jpg)

TCA transforms a best execution policy from a static compliance mandate into a dynamic, data-driven system for continuous performance optimization.

- 
### [How Does MiFID II Define All Sufficient Steps for Best Execution?](https://options.greeks.live/question/how-does-mifid-ii-define-all-sufficient-steps-for-best-execution/)
![A precision-engineered blue mechanism, symbolizing a high-fidelity execution engine, emerges from a rounded, light-colored liquidity pool component, encased within a sleek teal institutional-grade shell. This represents a Principal's operational framework for digital asset derivatives, demonstrating algorithmic trading logic and smart order routing for block trades via RFQ protocols, ensuring atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-os-core-algorithmic-execution-engine.jpg)

MiFID II defines all sufficient steps as building a dynamic, evidence-based system to demonstrably achieve the best client outcome.

- 
### [What Regulatory Frameworks Govern the Use of Smart Order Routers and Best Execution?](https://options.greeks.live/question/what-regulatory-frameworks-govern-the-use-of-smart-order-routers-and-best-execution/)
![Translucent teal panel with droplets signifies granular market microstructure and latent liquidity in digital asset derivatives. Abstract beige and grey planes symbolize diverse institutional counterparties and multi-venue RFQ protocols, enabling high-fidelity execution and price discovery for block trades via aggregated inquiry.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocols-liquidity-aggregation.jpg)

Regulatory frameworks mandate a verifiable, data-driven process for achieving the best client outcome across a fragmented liquidity landscape.

- 
### [What Are the Key Responsibilities of a Best Execution Committee?](https://options.greeks.live/question/what-are-the-key-responsibilities-of-a-best-execution-committee/)
![A precision-engineered component, like an RFQ protocol engine, displays a reflective blade and numerical data. It symbolizes high-fidelity execution within market microstructure, driving price discovery, capital efficiency, and algorithmic trading for institutional Digital Asset Derivatives on a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-execution-engine-core-for-institutional-digital-asset-derivatives-rfq-protocol-price-discovery.jpg)

A Best Execution Committee operationalizes a firm's fiduciary duty through a data-driven, systematic oversight of its trading functions.

- 
### [How Do Firms Practically Implement the Four-Fold Test for Best Execution?](https://options.greeks.live/question/how-do-firms-practically-implement-the-four-fold-test-for-best-execution/)
![A balanced blue semi-sphere rests on a horizontal bar, poised above diagonal rails, reflecting its form below. This symbolizes the precise atomic settlement of a block trade within an RFQ protocol, showcasing high-fidelity execution and capital efficiency in institutional digital asset derivatives markets, managed by a Prime RFQ with minimal slippage.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-6.jpg)

A firm implements the four-fold test by building an integrated system that systematically balances price, cost, speed, and certainty.

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            "@type": "Question",
            "name": "How Do You Document Qualitative Factors?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "Documenting the \"softer\" execution factors is a critical part of the process. This involves creating structured, evidence-based assessments. For example, the likelihood of execution for a venue can be quantified by tracking order fill rates and cancellation rates. Speed can be measured by analyzing latency from order routing to execution confirmation. These quantitative metrics are then used to support the qualitative assessment in the venue analysis process. The output of this analysis, often in the form of a scorecard, should be reviewed and signed off by the Best Execution Committee, creating another formal piece of evidence that demonstrates a diligent and structured approach."
            }
        }
    ]
}
```


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**Original URL:** https://options.greeks.live/question/how-do-firms-evidence-best-execution-without-rts-27-and-rts-28-reports/
