# How Do Regulatory Frameworks like MiFID II View the Use of Hybrid Models for Achieving Best Execution? ▴ Question

**Published:** 2025-08-06
**Categories:** Question

---

![A precise mechanism interacts with a reflective platter, symbolizing high-fidelity execution for institutional digital asset derivatives. It depicts advanced RFQ protocols, optimizing dark pool liquidity, managing market microstructure, and ensuring best execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-prime-os-1.jpg)

![Beige and teal angular modular components precisely connect on black, symbolizing critical system integration for a Principal's operational framework. This represents seamless interoperability within a Crypto Derivatives OS, enabling high-fidelity execution, efficient price discovery, and multi-leg spread trading via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-rfq-execution-microstructure-os-interop.jpg)

## Concept

Regulatory frameworks, particularly the Markets in Financial Instruments Directive II (MiFID II), do not explicitly define or approve “[hybrid execution](https://prime.greeks.live/area/hybrid-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) models.” Instead, the regulation’s architecture creates the precise environmental pressures that make such models a systemic necessity. The core of MiFID II’s best execution mandate is the requirement for investment firms to take “[all sufficient steps](https://prime.greeks.live/area/all-sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” to obtain the best possible result for their clients. This obligation extends beyond mere price to encompass a multi-dimensional array of factors ▴ costs, speed, likelihood of execution and settlement, size, and the intrinsic nature of the order itself.

An execution system designed to satisfy this mandate must be capable of navigating a complex and intentionally fragmented liquidity landscape. This is the operational space where [hybrid models](https://prime.greeks.live/area/hybrid-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) function.

A hybrid execution model is an integrated system that dynamically interacts with a spectrum of liquidity sources. It is an architecture, a coherent operational system that combines access to lit markets (like traditional exchanges and Multilateral Trading Facilities), dark pools, and bilateral liquidity channels such as [Systematic Internalisers](https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SIs) and Request for Quote (RFQ) protocols. The system’s intelligence lies in its ability to route orders based on a sophisticated, data-driven logic that weighs the competing [best execution factors](https://prime.greeks.live/area/best-execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) in real-time. The framework’s view, therefore, is one of implicit endorsement through functional demand.

A firm cannot logically demonstrate it has taken “all [sufficient steps](https://prime.greeks.live/area/sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” by confining its execution to a single type of venue. The regulation compels firms to build or access systems capable of making intelligent choices across the entire venue landscape, effectively mandating the capabilities that define a [hybrid model](https://prime.greeks.live/area/hybrid-model/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

> The regulatory framework of MiFID II necessitates hybrid execution models by demanding a verifiable, multi-factor approach to best execution across a fragmented venue landscape.

This perspective moves the conversation from a simple checklist of compliance to a more profound understanding of system design. The question is what kind of execution architecture is required to consistently meet the best possible outcome for a client across a diverse range of market conditions and order types. The answer is a system that can fluidly blend the [price discovery](https://prime.greeks.live/area/price-discovery/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and transparency of lit markets with the reduced [market impact](https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) of dark venues and the principal liquidity offered by SIs.

The regulation, by its very structure, favors systems that possess this adaptability. It is a performance-based mandate, and hybrid models represent the technological and strategic response to that performance challenge.

![Translucent, multi-layered forms evoke an institutional RFQ engine, its propeller-like elements symbolizing high-fidelity execution and algorithmic trading. This depicts precise price discovery, deep liquidity pool dynamics, and capital efficiency within a Prime RFQ for digital asset derivatives block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-14.jpg)

![A precision-engineered interface for institutional digital asset derivatives. A circular system component, perhaps an Execution Management System EMS module, connects via a multi-faceted Request for Quote RFQ protocol bridge to a distinct teal capsule, symbolizing a bespoke block trade](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-interface-for-institutional-digital-asset-derivatives-request-for-quote-protocol-high-fidelity-execution-within-principal-operating-system.jpg)

## Strategy

Developing a robust strategy for [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) under MiFID II requires viewing the available liquidity sources as a portfolio of options, each with distinct characteristics. A hybrid model’s core strategic function is to optimize order routing across this portfolio. The intelligence of the system, typically embodied in a [Smart Order Router](https://prime.greeks.live/area/smart-order-router/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SOR), is what translates regulatory requirements into an effective execution strategy. This strategy is built upon a deep understanding of how different venues serve the various factors of best execution.

![Polished metallic surface with a central intricate mechanism, representing a high-fidelity market microstructure engine. Two sleek probes symbolize bilateral RFQ protocols for precise price discovery and atomic settlement of institutional digital asset derivatives on a Prime RFQ, ensuring best execution for Bitcoin Options](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-engine-core-market-microstructure-intelligence-layer.jpg)

## Navigating a Fragmented Liquidity Landscape

[MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) solidified a market structure composed of diverse and competing execution venues. A successful strategy must treat this fragmentation as an opportunity. The SOR at the heart of a hybrid model does not view a lit exchange, a dark pool, and a [Systematic Internaliser](https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) as equivalents. It assesses them based on the specific needs of each client order.

- **[Lit Markets](https://prime.greeks.live/area/lit-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (Exchanges, MTFs)** ▴ [These venues](https://prime.greeks.live/question/how-should-a-traders-strategy-change-when-using-these-venues-in-volatile-versus-stable-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) offer transparent, pre-trade price discovery. The strategy for small, liquid orders in stable market conditions would prioritize routing to these venues to capitalize on competitive pricing. The trade-off is potential information leakage and market impact for larger orders. 

- **[Dark Pools](https://prime.greeks.live/area/dark-pools/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (Dark MTFs)** ▴ These venues withhold pre-trade transparency, making them ideal for executing large block orders without signaling intent to the broader market. The strategy here is to minimize market impact and adverse price movement. The risk is that execution may not be guaranteed or that the price obtained might be inferior to the best price available on a lit market at that precise moment. 

- **Systematic Internalisers (SIs)** ▴ An SI is an investment firm that deals on its own account by executing client orders outside of a regulated market or MTF. A hybrid model’s strategy incorporates SIs as a valuable source of principal liquidity. For certain orders, an SI can offer [price improvement](https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) over the public quote, providing a clear benefit under the “[total consideration](https://prime.greeks.live/area/total-consideration/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” test for retail clients. The strategy involves pinging the SI for a quote before exposing the order to other venues. 

- **Request for Quote (RFQ) Protocols** ▴ For less liquid instruments or large, complex orders, an RFQ system allows the firm to solicit quotes from multiple liquidity providers discreetly. This bilateral price discovery mechanism is a key component of a hybrid strategy for asset classes like OTC derivatives and bonds, where continuous lit market liquidity is scarce. 

![A central illuminated hub with four light beams forming an 'X' against dark geometric planes. This embodies a Prime RFQ orchestrating multi-leg spread execution, aggregating RFQ liquidity across diverse venues for optimal price discovery and high-fidelity execution of institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-orchestrating-high-fidelity-execution-and-optimal-price-discovery.jpg)

## How Do Hybrid Models Balance MiFID II Execution Factors?

The brilliance of a hybrid strategy is its ability to make dynamic, evidence-based trade-offs between the best [execution factors](https://prime.greeks.live/area/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The relative importance of these factors changes depending on the client’s classification (retail or professional), the instrument’s characteristics, and the order’s size. A retail client order, for instance, places primary importance on total consideration (price plus costs), while a large institutional order might prioritize likelihood of execution and minimizing market impact over a marginal price improvement.

The following table illustrates the strategic considerations a hybrid model’s SOR would apply when weighing execution factors against venue types.

| MiFID II Execution Factor | Venue Type Prioritized | Strategic Rationale |
| --- | --- | --- |
| Price & Cost (Total Consideration) | Lit Markets, Systematic Internalisers | For retail clients, achieving the best price and lowest cost is paramount. Lit markets provide competitive, transparent pricing. SIs can offer price improvement, directly enhancing total consideration. |
| Speed of Execution | Lit Markets, Systematic Internalisers | These venues typically offer the fastest execution via direct electronic access, which is vital for time-sensitive strategies or when capturing a fleeting price. |
| Likelihood of Execution | Lit Markets | The deep liquidity and continuous order flow on major exchanges provide the highest probability of finding a counterparty, especially for standard order sizes. |
| Size & Market Impact | Dark Pools, RFQ Protocols | For large block orders, preventing information leakage is the primary goal. Dark pools and discreet RFQ sessions allow the order to be worked without causing adverse price movements. |
| Nature of the Order (e.g. Illiquid) | RFQ Protocols, Systematic Internalisers | For instruments that do not trade on continuous markets, a bilateral negotiation via RFQ or engaging with an SI that makes a market in that instrument is the only viable strategy. |

> A successful execution strategy under MiFID II leverages a hybrid model to dynamically select the optimal venue by weighing the specific, and often competing, best execution factors for each individual order.

This dynamic balancing act is the essence of fulfilling the “all sufficient steps” obligation. It requires a pre-defined, yet flexible, [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) that can be audited and justified to regulators. The strategy is not static; it is a continuous process of analysis, execution, and review, powered by the data generated from every trade.

![A complex abstract digital rendering depicts intersecting geometric planes and layered circular elements, symbolizing a sophisticated RFQ protocol for institutional digital asset derivatives. The central glowing network suggests intricate market microstructure and price discovery mechanisms, ensuring high-fidelity execution and atomic settlement within a prime brokerage framework for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-5.jpg)

![A segmented teal and blue institutional digital asset derivatives platform reveals its core market microstructure. Internal layers expose sophisticated algorithmic execution engines, high-fidelity liquidity aggregation, and real-time risk management protocols, integral to a Prime RFQ supporting Bitcoin options and Ethereum futures trading](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-core-microstructure.jpg)

## Execution

The execution of a MiFID II-compliant strategy through a hybrid model is a function of sophisticated technology, rigorous data analysis, and documented governance. It is where the theoretical balancing of execution factors is translated into tangible, auditable actions. The core components of this execution framework are the Smart Order Router (SOR), [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA), and the firm’s overarching execution policy.

![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)

## The Smart Order Router Decision Matrix

The SOR is the operational heart of the hybrid model. It is an algorithm that automates the venue selection process based on a pre-programmed decision matrix. This matrix is a detailed representation of the firm’s execution policy, tailored to different asset classes and order types.

It codifies how the firm prioritizes the MiFID II execution factors in practice. A firm must be able to demonstrate to regulators precisely why the SOR routed a specific order in a particular way.

The following table provides a simplified example of an SOR decision matrix for equity orders, illustrating the practical application of the hybrid model.

| Order Profile | Primary MiFID II Factor | SOR Execution Logic (Sequential Path) | Justification |
| --- | --- | --- | --- |
| Retail Client, Small Order, FTSE 100 Stock | Total Consideration (Price & Cost) | 1. Check own SI for price improvement. 2. Sweep all accessible Lit Markets (MTFs, Exchanges) for the best displayed price. | This path is designed to meet the strict requirement to achieve the best possible price and cost for a retail client, prioritizing transparent venues and opportunities for price improvement. |
| Institutional Client, Large Block, FTSE 100 Stock | Size & Market Impact | 1. Ping multiple Dark Pools simultaneously with a portion of the order. 2. Use an algorithmic strategy (e.g. VWAP/TWAP) to work the remainder on Lit Markets over time. 3. Consider an RFQ to a select group of liquidity providers for the entire block. | The priority is to minimize information leakage. The SOR avoids showing the full order size to any single venue, using a combination of dark liquidity and time-sliced execution to reduce impact. |
| Any Client, Illiquid Small-Cap Stock | Likelihood of Execution | 1. Check SI of the corporate broker (if applicable). 2. Route to the primary listing exchange, as it is the most likely source of liquidity. 3. Initiate RFQ to specialist market makers. | For illiquid instruments, finding a counterparty is the main challenge. The logic prioritizes venues with a known specialization or concentration of interest in that specific stock. |

![A sleek conduit, embodying an RFQ protocol and smart order routing, connects two distinct, semi-spherical liquidity pools. Its transparent core signifies an intelligence layer for algorithmic trading and high-fidelity execution of digital asset derivatives, ensuring atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-execution-engine-bridging-diverse-liquidity-pools-via-high-fidelity-rfq-protocol-orchestration.jpg)

## The Role of Data Transaction Cost Analysis and Governance

MiFID II’s demand for “all sufficient steps” is an evidence-based requirement. A firm cannot simply claim its hybrid model works; it must prove it. This is achieved through a continuous feedback loop driven by [Transaction Cost](https://prime.greeks.live/area/transaction-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Analysis (TCA).

- **Pre-Trade Analysis** ▴ Before an order is sent to the SOR, a pre-trade TCA tool estimates the expected execution cost and market impact based on historical data and current market volatility. This sets a benchmark against which the execution quality will be measured. 

- **Post-Trade Analysis** ▴ After execution, a detailed TCA report is generated. This report compares the actual execution price against various benchmarks (e.g. arrival price, Volume-Weighted Average Price (VWAP), implementation shortfall). This analysis provides the quantitative evidence of whether the execution outcome was optimal. 

- **Policy Governance and Review** ▴ The outputs from the post-trade TCA are fed back into a governance process. A best execution committee must regularly review this data to assess the performance of the SOR’s logic and the quality of execution provided by each venue. If a particular dark pool consistently delivers poor fill rates or a lit market shows high price reversion, the SOR’s routing table must be adjusted. This documented process of monitoring, reviewing, and correcting deficiencies is a core tenet of MiFID II compliance. 

> Under MiFID II, the execution process is a cycle of data-driven analysis, automated routing, and rigorous review, designed to continuously prove and improve the quality of client outcomes.

![A central precision-engineered RFQ engine orchestrates high-fidelity execution across interconnected market microstructure. This Prime RFQ node facilitates multi-leg spread pricing and liquidity aggregation for institutional digital asset derivatives, minimizing slippage](https://options.greeks.live/wp-content/uploads/2025/08/high-fidelity-rfq-execution-for-institutional-crypto-derivatives.jpg)

## What Is the Impact of Removing RTS 27 and 28 Reporting?

Regulators in both the UK and the EU have moved to scrap the obligations for firms to produce [RTS 27](https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (from venues) and [RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (from firms) reports. These reports were found to be of limited use to investors and burdensome for firms to produce. This development does not weaken the best execution obligation. It strengthens the focus on a firm’s internal systems and controls.

The removal of these standardized reports means regulators will place even greater emphasis on a firm’s ability to demonstrate, upon request, its own robust, data-driven process for achieving best execution. The quality of a firm’s internal TCA, the sophistication of its SOR, and the rigor of its governance committee become the primary evidence of compliance. The focus shifts from public, standardized reporting to the quality and integrity of the internal execution architecture itself.

![A Principal's RFQ engine core unit, featuring distinct algorithmic matching probes for high-fidelity execution and liquidity aggregation. This price discovery mechanism leverages private quotation pathways, optimizing crypto derivatives OS operations for atomic settlement within its systemic architecture](https://options.greeks.live/wp-content/uploads/2025/08/principals-rfq-engine-driving-optimal-digital-asset-derivatives.jpg)

## References

- Hogan Lovells. “Achieving best execution under MiFID II.” 31 August 2017.

- International Capital Market Association. “MiFID II Best Execution requirements for repo and SFTs ▴ The challenges and (im)practicalities.” January 2017.

- European Securities and Markets Authority. “Final Report on the Technical Standards specifying the criteria for establishing and assessing the effecti.” ESMA35-335435667-6253, 10 April 2025.

- International Capital Market Association. “MiFID II/R Fixed Income Best Execution Requirements.” 2017.

- Ashurst. “Best Execution under updated MIFID ESMA thinks order execution policies are generic and not used.” 22 July 2024.

- PwC Legal. “ESMA consults on firms’ order execution policies under MiFID II.” 18 July 2024.

- eflow Global. “Unpacking ESMA’s technical standards for best execution ▴ A closer look at the latest consultation.” 30 August 2024.

- Cleveland & Co. “FCA changes to MiFID II research rules and an end to RTS 27 and RTS 28 best execution reporting.” 21 April 2022.

- TRAction Fintech. “RTS 27 and 28 ▴ The 2024 Status of These Reports in UK and EU.” 14 February 2024.

- Deloitte. “MiFID II ▴ Best Execution.” June 2015.

![A complex, multi-layered electronic component with a central connector and fine metallic probes. This represents a critical Prime RFQ module for institutional digital asset derivatives trading, enabling high-fidelity execution of RFQ protocols, price discovery, and atomic settlement for multi-leg spreads with minimal latency](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-rfq-engine-driving-best-execution-and-liquidity.jpg)

## Reflection

![A spherical, eye-like structure, an Institutional Prime RFQ, projects a sharp, focused beam. This visualizes high-fidelity execution via RFQ protocols for digital asset derivatives, enabling block trades and multi-leg spreads with capital efficiency and best execution across market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-prime-os-rfq-protocol-digital-asset-derivatives-block-trade-execution.jpg)

## Is Your Execution Architecture a System or a Series of Steps?

The principles embedded within MiFID II compel a move away from viewing execution as a sequence of discrete tasks. The framework challenges firms to architect a single, coherent system where strategy, technology, and governance are fully integrated. The removal of prescriptive reporting like RTS 28 amplifies this point; the focus is now entirely on the integrity and intelligence of your internal process. How does your firm’s current operational framework stand up to this view?

Does your post-trade analysis directly and dynamically inform your pre-trade strategy, or do the reports serve as a historical record? The objective is to build a living architecture that learns from every execution, constantly refining its logic to prove it is taking all sufficient steps. The ultimate advantage lies in possessing an execution system that is not just compliant, but demonstrably superior in its ability to protect client interests across all market conditions.

![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)

## Glossary

<a href="https://prime.greeks.live/area/all-sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A geometric abstraction depicts a central multi-segmented disc intersected by angular teal and white structures, symbolizing a sophisticated Principal-driven RFQ protocol engine. This represents high-fidelity execution, optimizing price discovery across diverse liquidity pools for institutional digital asset derivatives like Bitcoin options, ensuring atomic settlement and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-for-prime-os.jpg)

## All Sufficient Steps

Meaning ▴ All Sufficient Steps denotes a design principle and operational mandate within a system where every component or process is engineered to autonomously achieve its defined objective without requiring external intervention or additional inputs beyond its initial parameters. </a><a href="https://prime.greeks.live/area/hybrid-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision mechanism, symbolizing an algorithmic trading engine, centrally mounted on a market microstructure surface. Lens-like features represent liquidity pools and an intelligence layer for pre-trade analytics, enabling high-fidelity execution of institutional grade digital asset derivatives via RFQ protocols within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-microstructure.jpg)

## Hybrid Execution

Meaning ▴ Hybrid Execution refers to an advanced execution methodology that dynamically combines distinct liquidity access strategies, typically integrating direct market access to central limit order books with opportunistic engagement of over-the-counter (OTC) or dark pool liquidity sources. </a><a href="https://prime.greeks.live/area/hybrid-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered institutional-grade Prime RFQ component, showcasing a reflective sphere and teal control. This symbolizes RFQ protocol mechanics, emphasizing high-fidelity execution, atomic settlement, and capital efficiency in digital asset derivatives market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-precision-execution-system-design.jpg)

## Hybrid Models

Meaning ▴ Hybrid Models represent advanced algorithmic execution frameworks engineered to dynamically integrate and leverage multiple liquidity access protocols and order routing strategies across fragmented digital asset markets. </a><a href="https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Detailed metallic disc, a Prime RFQ core, displays etched market microstructure. Its central teal dome, an intelligence layer, facilitates price discovery](https://options.greeks.live/wp-content/uploads/2025/07/principal-operating-system-intelligence-layer-powering-digital-asset-derivatives-rfq-protocols-for-optimal-execution.jpg)

## Systematic Internalisers

Meaning ▴ A market participant, typically a broker-dealer, systematically executing client orders against its own inventory or other client orders off-exchange, acting as principal. </a><a href="https://prime.greeks.live/area/best-execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision metallic dial on a multi-layered interface embodies an institutional RFQ engine. The translucent panel suggests an intelligence layer for real-time price discovery and high-fidelity execution of digital asset derivatives, optimizing capital efficiency for block trades within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-high-fidelity-execution-system.jpg)

## Best Execution Factors

Meaning ▴ Best Execution Factors are the quantifiable and qualitative criteria mandated for assessing the optimal execution of client orders, ensuring the most favorable terms are achieved given prevailing market conditions. </a><a href="https://prime.greeks.live/area/sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A fractured, polished disc with a central, sharp conical element symbolizes fragmented digital asset liquidity. This Principal RFQ engine ensures high-fidelity execution, precise price discovery, and atomic settlement within complex market microstructure, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-unifying-fragmented-digital-asset-derivatives-liquidity-for-best-execution.jpg)

## Sufficient Steps

Meaning ▴ Sufficient Steps constitute the minimum, verifiable sequence of operations required to achieve a defined, deterministic outcome within a financial protocol or system, ensuring operational closure and state transition. </a><a href="https://prime.greeks.live/area/hybrid-model/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A symmetrical, angular mechanism with illuminated internal components against a dark background, abstractly representing a high-fidelity execution engine for institutional digital asset derivatives. This visualizes the market microstructure and algorithmic trading precision essential for RFQ protocols, multi-leg spread strategies, and atomic settlement within a Principal OS framework, ensuring capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-engine-for-institutional-digital-asset-derivatives-rfq.jpg)

## Hybrid Model

Meaning ▴ A Hybrid Model defines a sophisticated computational framework designed to dynamically combine distinct operational or execution methodologies, typically integrating elements from both centralized and decentralized paradigms within a singular, coherent system. </a><a href="https://prime.greeks.live/area/price-discovery/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A luminous, multi-faceted geometric structure, resembling interlocking star-like elements, glows from a circular base. This represents a Prime RFQ for Institutional Digital Asset Derivatives, symbolizing high-fidelity execution of block trades via RFQ protocols, optimizing market microstructure for price discovery and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system.jpg)

## Price Discovery

Meaning ▴ Price discovery is the continuous, dynamic process by which the market determines the fair value of an asset through the collective interaction of supply and demand. </a><a href="https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central glowing core within metallic structures symbolizes an Institutional Grade RFQ engine. This Intelligence Layer enables optimal Price Discovery and High-Fidelity Execution for Digital Asset Derivatives, streamlining Block Trade and Multi-Leg Spread Atomic Settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-microstructure-core.jpg)

## Market Impact

Meaning ▴ Market Impact refers to the observed change in an asset's price resulting from the execution of a trading order, primarily influenced by the order's size relative to available liquidity and prevailing market conditions. </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">
![A sleek, angular Prime RFQ interface component featuring a vibrant teal sphere, symbolizing a precise control point for institutional digital asset derivatives. This represents high-fidelity execution and atomic settlement within advanced RFQ protocols, optimizing price discovery and liquidity across complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-control-point.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/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sharp, translucent, green-tipped stylus extends from a metallic system, symbolizing high-fidelity execution for digital asset derivatives. It represents a private quotation mechanism within an institutional grade Prime RFQ, enabling optimal price discovery for block trades via RFQ protocols, ensuring capital efficiency and minimizing slippage](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-interface.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/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A large, smooth sphere, a textured metallic sphere, and a smaller, swirling sphere rest on an angular, dark, reflective surface. This visualizes a principal liquidity pool, complex structured product, and dynamic volatility surface, representing high-fidelity execution within an institutional digital asset derivatives market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-optimized-market-microstructure-precision.jpg)

## Systematic Internaliser

Meaning ▴ A Systematic Internaliser (SI) is a financial institution executing client orders against its own capital on an organized, frequent, systematic basis off-exchange. </a><a href="https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-layered, circular device with a central concentric lens. It symbolizes an RFQ engine for precision price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-for-precision-execution.jpg)

## Mifid Ii

Meaning ▴ MiFID II, the Markets in Financial Instruments Directive II, constitutes a comprehensive regulatory framework enacted by the European Union to govern financial markets, investment firms, and trading venues. </a><a href="https://prime.greeks.live/question/how-should-a-traders-strategy-change-when-using-these-venues-in-volatile-versus-stable-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A complex metallic mechanism features a central circular component with intricate blue circuitry and a dark orb. This symbolizes the Prime RFQ intelligence layer, driving institutional RFQ protocols for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-rfq-engine-for-digital-asset-derivatives-best-trade-execution.jpg)

## These Venues

A trader's strategy adapts to market state by re-architecting execution from stealth to speed. </a><a href="https://prime.greeks.live/area/lit-markets/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-faceted algorithmic execution engine, reflective with teal components, navigates a cratered market microstructure. It embodies a Principal's operational framework for high-fidelity execution of digital asset derivatives, optimizing capital efficiency, best execution via RFQ protocols in a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/advanced-rfq-protocol-engine-for-institutional-digital-asset-derivatives.jpg)

## Lit Markets

Meaning ▴ Lit Markets are centralized exchanges or trading venues characterized by pre-trade transparency, where bids and offers are publicly displayed in an order book prior to execution. </a><a href="https://prime.greeks.live/area/dark-pools/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Glossy, intersecting forms in beige, blue, and teal embody RFQ protocol efficiency, atomic settlement, and aggregated liquidity for institutional digital asset derivatives. The sleek design reflects high-fidelity execution, prime brokerage capabilities, and optimized order book dynamics for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-digital-asset-derivatives-execution-via-optimized-rfq-protocols-enhancing-principal-operational-frameworks.jpg)

## Dark Pools

Meaning ▴ Dark Pools are alternative trading systems (ATS) that facilitate institutional order execution away from public exchanges, characterized by pre-trade anonymity and non-display of liquidity. </a><a href="https://prime.greeks.live/area/total-consideration/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![This visual represents an advanced Principal's operational framework for institutional digital asset derivatives. A foundational liquidity pool seamlessly integrates dark pool capabilities for block trades](https://options.greeks.live/wp-content/uploads/2025/07/principal-crypto-derivatives-os-rfq-execution-microstructure.jpg)

## Total Consideration

Meaning ▴ Total Consideration represents the comprehensive economic value exchanged in a transaction, encompassing all components of payment, fees, and other direct or indirect value transfers. </a><a href="https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision mechanics illustrating institutional RFQ protocol dynamics. Metallic and blue blades symbolize principal's bids and counterparty responses, pivoting on a central matching engine](https://options.greeks.live/wp-content/uploads/2025/07/precision-institutional-digital-asset-derivatives-rfq-execution-engine-microstructure.jpg)

## Price Improvement

Meaning ▴ Price improvement denotes the execution of a trade at a more advantageous price than the prevailing National Best Bid and Offer (NBBO) at the moment of order submission. </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">
![Interconnected modular components with luminous teal-blue channels converge diagonally, symbolizing advanced RFQ protocols for institutional digital asset derivatives. This depicts high-fidelity execution, price discovery, and aggregated liquidity across complex market microstructure, emphasizing atomic settlement, capital efficiency, and a robust Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-protocols.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-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central, precision-engineered component with teal accents rises from a reflective surface. This embodies a high-fidelity RFQ engine, driving optimal price discovery for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-engine-for-price-discovery.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/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting multi-asset liquidity channels with an embedded intelligence layer define this precision-engineered framework. It symbolizes advanced institutional digital asset RFQ protocols, visualizing sophisticated market microstructure for high-fidelity execution, mitigating counterparty risk and enabling atomic settlement across crypto derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-system-microstructure-dynamics.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/transaction-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Transaction Cost

Meaning ▴ Transaction Cost represents the total quantifiable economic friction incurred during the execution of a trade, encompassing both explicit costs such as commissions, exchange fees, and clearing charges, alongside implicit costs like market impact, slippage, and opportunity cost. </a><a href="https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, institutional-grade device, with a glowing indicator, represents a Prime RFQ terminal. Its angled posture signifies focused RFQ inquiry for Digital Asset Derivatives, enabling high-fidelity execution and precise price discovery within complex market microstructure, optimizing latent liquidity](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-execution-terminal-facilitating-high-fidelity-price-discovery-and-optimal-liquidity-aggregation.jpg)

## Rts 27

Meaning ▴ RTS 27 mandates that investment firms and market operators publish detailed data on the quality of execution of transactions on their venues. </a><a href="https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precise mechanical interaction between structured components and a central dark blue element. This abstract representation signifies high-fidelity execution of institutional RFQ protocols for digital asset derivatives, optimizing price discovery and minimizing slippage within robust market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-interface.jpg)

## Rts 28

Meaning ▴ RTS 28 refers to Regulatory Technical Standard 28 under MiFID II, which mandates investment firms and market operators to publish annual reports on the quality of execution of transactions on trading venues and for financial instruments. </a>

**Tags:** [Sufficient Steps](https://options.greeks.live/area/sufficient-steps/), [RTS 27](https://options.greeks.live/area/rts-27/), [Execution Factors](https://options.greeks.live/area/execution-factors/), [RFQ Protocols](https://options.greeks.live/area/rfq-protocols/), [International Capital Market Association](https://options.greeks.live/area/international-capital-market-association/), [Lit Markets](https://options.greeks.live/area/lit-markets/)	

## Discover More

- 
### [How Does MiFID II Specifically Define the Best Execution Obligations for Firms?](https://options.greeks.live/question/how-does-mifid-ii-specifically-define-the-best-execution-obligations-for-firms/)
![Polished opaque and translucent spheres intersect sharp metallic structures. This abstract composition represents advanced RFQ protocols for institutional digital asset derivatives, illustrating multi-leg spread execution, latent liquidity aggregation, and high-fidelity execution within principal-driven trading environments.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-optimal-execution-orchestration.jpg)

MiFID II defines best execution as an auditable, data-driven duty to secure the optimal client result across all relevant execution factors.

- 
### [How Do Systematic Internalisers Complicate Best Execution in the European Union?](https://options.greeks.live/question/how-do-systematic-internalisers-complicate-best-execution-in-the-european-union/)
![A precisely engineered system features layered grey and beige plates, representing distinct liquidity pools or market segments, connected by a central dark blue RFQ protocol hub. Transparent teal bars, symbolizing multi-leg options spreads or algorithmic trading pathways, intersect through this core, facilitating price discovery and high-fidelity execution of digital asset derivatives via an institutional-grade Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-multi-leg-options-spread-execution-best-price-discovery-and-latent-liquidity-access-for-prime-brokerage.jpg)

Systematic Internalisers complicate best execution by fragmenting liquidity into private, principal-based pools, demanding advanced analytics to prove value over transparent, public markets.

- 
### [How Did MiFID II’s Best Execution Requirements Change Buy-Side Routing Decisions?](https://options.greeks.live/question/how-did-mifid-iis-best-execution-requirements-change-buy-side-routing-decisions/)
![Abstract geometric forms, including overlapping planes and central spherical nodes, visually represent a sophisticated institutional digital asset derivatives trading ecosystem. It depicts complex multi-leg spread execution, dynamic RFQ protocol liquidity aggregation, and high-fidelity algorithmic trading within a Prime RFQ framework, ensuring optimal price discovery and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-liquidity-aggregation-market-microstructure-high-fidelity-execution-alpha-generation-prime-os-capital-efficiency.jpg)

MiFID II mandated a shift from qualitative best-effort to a quantitative, data-driven, and provable execution architecture.

- 
### [In What Ways Do Automated RFQ Protocols Help Firms Meet MiFID II Best Execution Requirements?](https://options.greeks.live/question/in-what-ways-do-automated-rfq-protocols-help-firms-meet-mifid-ii-best-execution-requirements/)
![Abstract geometric planes in teal, navy, and grey intersect. A central beige object, symbolizing a precise RFQ inquiry, passes through a teal anchor, representing High-Fidelity Execution within Institutional Digital Asset Derivatives. This depicts optimal Price Discovery and Liquidity Aggregation.](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-digital-asset-derivatives-high-fidelity-execution-liquidity-aggregation-price-discovery-market-microstructure.jpg)

Automated RFQ protocols systematize competitive price discovery, generating the auditable data trail required to prove MiFID II best execution.

- 
### [How Do Regulatory Changes like MiFID II Impact the Measurement and Reporting of Dark Pool Transaction Costs?](https://options.greeks.live/question/how-do-regulatory-changes-like-mifid-ii-impact-the-measurement-and-reporting-of-dark-pool-transaction-costs/)
![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)

MiFID II mandates a granular, evidence-based system for measuring and reporting dark pool costs to enforce transparency and best execution.

- 
### [How Did Mifid Ii Change the Best Execution Standard for Rfq Platforms?](https://options.greeks.live/question/how-did-mifid-ii-change-the-best-execution-standard-for-rfq-platforms/)
![Intricate metallic components signify system precision engineering. These structured elements symbolize institutional-grade infrastructure for high-fidelity execution of digital asset derivatives. Mechanics highlight RFQ protocol efficiency, atomic settlement, and robust market microstructure for optimal price discovery within a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-precision-engineering-for-high-fidelity-execution-and-latency-optimization.jpg)

MiFID II codified best execution into a data-driven, auditable protocol, transforming RFQ platforms into critical compliance infrastructure.

- 
### [How Does MiFID II Change the Evidentiary Burden for Asset Managers?](https://options.greeks.live/question/how-does-mifid-ii-change-the-evidentiary-burden-for-asset-managers/)
![A transparent, multi-faceted component, indicative of an RFQ engine's intricate market microstructure logic, emerges from complex FIX Protocol connectivity. Its sharp edges signify high-fidelity execution and price discovery precision for institutional digital asset derivatives. This Prime RFQ module optimizes algorithmic trading and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimized-for-best-execution.jpg)

MiFID II transforms the evidentiary burden into a systemic requirement to prove optimal execution outcomes through continuous data analysis.

- 
### [How Does MiFID II Differentiate Best Execution Requirements for Lit and Dark Trading Venues?](https://options.greeks.live/question/how-does-mifid-ii-differentiate-best-execution-requirements-for-lit-and-dark-trading-venues/)
![A central illuminated hub with four light beams forming an 'X' against dark geometric planes. This embodies a Prime RFQ orchestrating multi-leg spread execution, aggregating RFQ liquidity across diverse venues for optimal price discovery and high-fidelity execution of institutional digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-orchestrating-high-fidelity-execution-and-optimal-price-discovery.jpg)

MiFID II mandates a differentiated best execution analysis, weighing lit venue price transparency against the dark venue benefit of mitigating market impact.

- 
### [How Can a TCA Framework Help Institutions Meet Best Execution Requirements under MiFID II?](https://options.greeks.live/question/how-can-a-tca-framework-help-institutions-meet-best-execution-requirements-under-mifid-ii/)
![A central core, symbolizing a Crypto Derivatives OS and Liquidity Pool, is intersected by two abstract elements. These represent Multi-Leg Spread and Cross-Asset Derivatives executed via RFQ Protocol. This visual embodies High-Fidelity Execution within an Institutional Trading framework, emphasizing Market Microstructure and Capital Efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-multi-leg-spread-execution.jpg)

A TCA framework translates execution data into verifiable proof, embedding MiFID II compliance directly into an institution's operational core.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "How Do Regulatory Frameworks like MiFID II View the Use of Hybrid Models for Achieving Best Execution?",
            "item": "https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-view-the-use-of-hybrid-models-for-achieving-best-execution/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "https://greeks.live/#organization",
    "name": "Greeks.Live",
    "url": "https://greeks.live/",
    "description": "Greeks.live is the definitive toolkit for the professional options trader, dedicated to empowering our users with institutional-grade data, advanced analytics, and a comprehensive suite of trading tools designed to provide a decisive edge in the market. Every article and guide published under the Greeks.live name is a product of our deep commitment to data-driven analysis and our mission to support the global trading community.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        }
    ],
    "sameAs": [
        "https://x.com/greekslive",
        "https://youtube.com/@greeks_live?si=-KjT0Lkw4WUCI0tD",
        "https://t.me/greekslive_notifications",
        "https://t.me/greekslive",
        "https://pinterest.com/greekslive/"
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Lending Tools",
                "url": "https://lend.greeks.live",
                "description": "Manage crypto lending and borrowing activities to earn yield or secure loans. This suite of tools helps users analyze interest rates and manage collateralized debt positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Profit & Loss Analysis (PnL)",
                "url": "https://greeks.live/#/deribit/tools/pnl_analysis",
                "description": "Track and analyze the Profit and Loss (PnL) of your options portfolio. This tool provides detailed performance metrics to help traders evaluate and refine their strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Position Visualization",
                "url": "https://greeks.live/#/deribit/tools/pv/BTC",
                "description": "Visualize complex options positions and their corresponding risk profiles. This tool generates payoff diagrams to help traders intuitively understand potential profit, loss, and exposure.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Calculator",
                "url": "https://greeks.live/#/deribit/tools/calculator",
                "description": "Calculate the theoretical price and risk parameters ('the Greeks') of crypto options. An essential tool for pricing new trades and analyzing the sensitivity of existing positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live Main Platform",
                "url": "https://greeks.live/",
                "description": "The central hub for the Greeks.live suite of professional cryptocurrency options and derivatives trading tools. Access analytics, manage positions, and explore the ecosystem.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Community Forum",
                "url": "https://t.greeks.live",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for Deribit",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for OKX",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "GLVS.AI Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "An AI-powered platform for automated crypto options trading. Leverage advanced algorithms and data-driven signals to develop and deploy sophisticated, hands-free trading strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "API Testnet & Sandbox",
                "url": "https://test.greeks.live",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        }
    ],
    "subOrganization": [
        {
            "@type": "Organization",
            "name": "GreeksLive HK Co., Limited",
            "email": "support@greeks.live",
            "telephone": "+852-56418949",
            "address": {
                "@type": "PostalAddress",
                "streetAddress": "Unit 11, 27/F, K. Wah Centre, 191 Java Road",
                "addressLocality": "Hong Kong",
                "addressRegion": "North Point",
                "addressCountry": "CN",
                "postalCode": "0000"
            },
            "geo": {
                "@type": "GeoCoordinates",
                "latitude": "22.2932357",
                "longitude": "114.2022026"
            },
            "image": "https://options.greeks.live/wp-content/uploads/2025/08/Wah-Centre-Hong-Kong.jpg"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-view-the-use-of-hybrid-models-for-achieving-best-execution/"
    },
    "headline": "How Do Regulatory Frameworks like MiFID II View the Use of Hybrid Models for Achieving Best Execution? \u25b4 Question",
    "description": "MiFID II views hybrid models as the necessary architectural response to its mandate for evidence-based, multi-factor best execution. \u25b4 Question",
    "url": "https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-view-the-use-of-hybrid-models-for-achieving-best-execution/",
    "datePublished": "2025-08-06T16:16:00+00:00",
    "dateModified": "2025-08-06T16:16:03+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/modular-rfq-protocol-engine-for-digital-asset-derivatives-prime-os.jpg",
        "caption": "A close-up abstract view reveals a sophisticated, multi-part mechanism: a central metallic bar connecting to two black, domed modules with bright green indicator strips. This visual metaphor represents a Principal's Prime RFQ facilitating bespoke liquidity for institutional digital asset derivatives. It illustrates the precision of an RFQ protocol in enabling block trade execution and price discovery across dark liquidity pools. The robust interconnection signifies low-latency execution, optimized for capital efficiency and regulatory compliance, ensuring best execution."
    },
    "keywords": [
        "All Sufficient Steps",
        "Best Execution",
        "Best Execution Factors",
        "Cost Analysis",
        "Dark Pools",
        "Execution Factors",
        "Execution Policy",
        "Hybrid Execution",
        "Hybrid Execution Model",
        "Hybrid Model",
        "Hybrid Models",
        "International Capital Market Association",
        "Liquidity Fragmentation",
        "Lit Markets",
        "Market Impact",
        "MiFID II",
        "Price Discovery",
        "Price Improvement",
        "RFQ Protocols",
        "RTS 27",
        "RTS 28",
        "Smart Order Router",
        "Sufficient Steps",
        "Systematic Internaliser",
        "Systematic Internalisers",
        "Total Consideration",
        "Transaction Cost",
        "Transaction Cost Analysis"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://options.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://options.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "FAQPage",
    "mainEntity": [
        {
            "@type": "Question",
            "name": "How Do Hybrid Models Balance MiFID II Execution Factors?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The brilliance of a hybrid strategy is its ability to make dynamic, evidence-based trade-offs between the best execution factors. The relative importance of these factors changes depending on the client's classification (retail or professional), the instrument's characteristics, and the order's size. A retail client order, for instance, places primary importance on total consideration (price plus costs), while a large institutional order might prioritize likelihood of execution and minimizing market impact over a marginal price improvement."
            }
        },
        {
            "@type": "Question",
            "name": "What Is The Impact Of Removing RTS 27 and 28 Reporting?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "Regulators in both the UK and the EU have moved to scrap the obligations for firms to produce RTS 27 (from venues) and RTS 28 (from firms) reports. These reports were found to be of limited use to investors and burdensome for firms to produce. This development does not weaken the best execution obligation. It strengthens the focus on a firm's internal systems and controls. The removal of these standardized reports means regulators will place even greater emphasis on a firm's ability to demonstrate, upon request, its own robust, data-driven process for achieving best execution. The quality of a firm's internal TCA, the sophistication of its SOR, and the rigor of its governance committee become the primary evidence of compliance. The focus shifts from public, standardized reporting to the quality and integrity of the internal execution architecture itself."
            }
        },
        {
            "@type": "Question",
            "name": "Is Your Execution Architecture A System Or A Series Of Steps?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The principles embedded within MiFID II compel a move away from viewing execution as a sequence of discrete tasks. The framework challenges firms to architect a single, coherent system where strategy, technology, and governance are fully integrated. The removal of prescriptive reporting like RTS 28 amplifies this point; the focus is now entirely on the integrity and intelligence of your internal process. How does your firm's current operational framework stand up to this view? Does your post-trade analysis directly and dynamically inform your pre-trade strategy, or do the reports serve as a historical record? The objective is to build a living architecture that learns from every execution, constantly refining its logic to prove it is taking all sufficient steps. The ultimate advantage lies in possessing an execution system that is not just compliant, but demonstrably superior in its ability to protect client interests across all market conditions."
            }
        }
    ]
}
```


---

**Original URL:** https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-view-the-use-of-hybrid-models-for-achieving-best-execution/
