# How Does an RFQ Platform Support Regulatory Reporting? ▴ Question

**Published:** 2025-07-29
**Categories:** Question

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## Concept

An institutional request-for-quote platform operates as a foundational architecture for regulatory compliance. Its primary function, the solicitation and negotiation of bilateral pricing, produces a structured, time-stamped, and immutable data stream as a natural byproduct of its operation. This data exhaust is the raw material of [regulatory reporting](https://prime.greeks.live/area/regulatory-reporting/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

The system is engineered from the ground up to capture the complete lifecycle of a trade negotiation, transforming what was once ephemeral communication into a permanent, auditable record. Every inquiry, response, and execution decision is memorialized within the system’s ledger, creating a verifiable chain of evidence that satisfies regulatory mandates for transparency and record-keeping.

The inherent design of a [quote solicitation protocol](https://prime.greeks.live/area/quote-solicitation-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) provides a systemic solution to the challenge of fragmented regulatory data. By centralizing the pre-trade discovery and execution process for [off-book liquidity](https://prime.greeks.live/area/off-book-liquidity/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the platform creates a single source of truth for each transaction. This centralized data object contains the identities of the counterparties, the precise timing of each interaction, the prices quoted, and the final terms of the trade. This structured data capture is the core mechanism that underpins all subsequent reporting functions, from post-trade transparency reports to detailed audit trail submissions.

> The platform’s core design transforms trade negotiation into a structured data capture process, forming the bedrock of regulatory compliance.

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## The Architecture of Compliance

The system’s architecture is built on the principle of [data integrity](https://prime.greeks.live/area/data-integrity/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). Each stage of the RFQ workflow ▴ from the initial request to the final execution ▴ generates a specific set of data points that are captured and stored in a consistent, structured format. This systematic approach to data collection ensures that the information required for regulatory reporting is complete, accurate, and readily accessible. The platform functions as a distributed ledger for bilateral transactions, providing a shared, consistent view of the trade details for both counterparties and, by extension, for regulators.

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## Data Structuring at Point of Origin

The moment an institution initiates a quote request, the platform begins to build a comprehensive data record. This initial data packet includes the instrument, the desired size, and the selected counterparties. As dealers respond with their quotes, the platform appends each price and its associated timestamp to the record.

The final execution details, including the winning quote and the execution time, complete the data object. This process ensures that all relevant information is captured at the point of origin, eliminating the need for manual reconciliation or data reconstruction after the fact.

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## Strategy

Strategically, an RFQ platform serves as a firm’s operational hub for managing regulatory obligations across multiple jurisdictions and asset classes. The platform’s data architecture is designed to be adaptable, allowing institutions to configure their [data capture](https://prime.greeks.live/area/data-capture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and reporting workflows to meet the specific requirements of different regulatory regimes, such as MiFID II in Europe and the [Consolidated Audit Trail](https://prime.greeks.live/area/consolidated-audit-trail/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (CAT) in the United States. This adaptability provides a significant strategic advantage, enabling firms to centralize their compliance efforts and reduce the operational complexity of navigating a fragmented global regulatory landscape.

The platform’s strategic value lies in its ability to provide a defensible [audit trail](https://prime.greeks.live/area/audit-trail/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for every transaction. This audit trail is the evidentiary basis for demonstrating compliance with [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) mandates and other regulatory requirements. By capturing a complete record of the quoting and execution process, the platform allows firms to prove that they have exercised reasonable diligence in seeking the best possible price for their clients. This capability is essential for managing regulatory risk and protecting the firm’s reputation.

> Leveraging the platform’s configurable data architecture allows a firm to unify its approach to diverse global regulatory regimes.

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## Mapping Platform Capabilities to Regulatory Mandates

An institution’s compliance strategy involves mapping the platform’s inherent data capture capabilities to the specific data fields required by each relevant regulation. This process transforms the platform from a simple execution tool into a strategic compliance asset. The table below illustrates how specific platform features directly address the requirements of major regulatory frameworks.

| Platform Feature | MiFID II/MiFIR Application | Consolidated Audit Trail (CAT) Application |
| --- | --- | --- |
| Microsecond Timestamping | Provides the granular, high-precision timestamps required for post-trade transparency reporting and transaction reporting under RTS 22. | Fulfills the requirement to report all “reportable events” with precise timestamps, creating a complete lifecycle audit trail for every order. |
| Counterparty Identification | Captures and stores Legal Entity Identifiers (LEIs) for all parties to a trade, a critical data point for MiFID II transaction reports. | Generates and associates a Firm Designated ID (FDID) with each order event, ensuring accurate attribution within the CAT system. |
| Quote and Order Logging | Creates a complete record of all quotes received, providing the necessary evidence for best execution analysis as required by RTS 27/28. | Logs every order origination, modification, and cancellation, providing the detailed data needed for CAT reporting. |
| Execution Venue Data | Identifies the execution venue (e.g. OTF, SI) and captures the relevant data for on-venue vs. off-venue reporting obligations. | Provides the necessary context for reporting trades executed on a bilateral basis, distinct from lit exchange executions. |

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## How Does the Platform Prove Best Execution?

The platform provides a systematic and repeatable process for demonstrating best execution. The act of soliciting quotes from multiple dealers creates a competitive environment that naturally drives price discovery. The platform’s ability to log all competing quotes, along with the final execution price and time, provides a clear and objective record of the firm’s efforts to achieve the best possible outcome for its clients. This data can be used to generate detailed [transaction cost analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) reports that satisfy the “regular and rigorous” review requirements of regulators like FINRA.

- **Evidence of Competition**
The platform logs every quote received, creating a contemporaneous record of the available liquidity and pricing at the moment of the trade.

- **Documentation of Decision**
The system records which quote was selected for execution, providing a clear audit trail of the final trading decision.

- **Quantitative Analysis**
The captured data can be fed into TCA models to compare the execution price against relevant benchmarks, providing a quantitative assessment of execution quality.

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## Execution

The execution of regulatory reporting through an [RFQ platform](https://prime.greeks.live/area/rfq-platform/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a matter of high-fidelity data management and systemic integration. The platform’s operational protocols are designed to ensure that the data captured during the trading process is not only complete and accurate but also formatted and transmitted in a manner that meets the technical specifications of various regulatory reporting systems. This involves a deep understanding of data formats, transmission protocols, and the specific data field requirements of each regulator.

At the execution level, the platform functions as a data processing engine, transforming the raw data from trade negotiations into structured reports ready for submission. This process is often automated, with the platform’s reporting module configured to generate and transmit reports to Approved Publication Arrangements (APAs), Approved Reporting Mechanisms (ARMs), or the CAT central repository on a real-time or end-of-day basis. The reliability of this automated process is critical for ensuring timely and accurate compliance.

> The platform’s execution protocols translate raw trade data into compliant, structured reports for seamless regulatory submission.

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## The Lifecycle of a Regulatory Report

The generation of a regulatory report is the final step in a data lifecycle that begins with the initiation of an RFQ. Each stage of this lifecycle is critical for ensuring the integrity of the final report. The table below details the data captured at each stage of the RFQ process and its relevance to a hypothetical MiFID II post-trade report.

| RFQ Stage | Data Captured | Relevance to Regulatory Report |
| --- | --- | --- |
| Initiation | Initiator LEI, Instrument ISIN, Quantity, Timestamp | Populates the fields for the submitting entity, financial instrument identification, and trade timestamp. |
| Quoting | Responder LEIs, Quote Prices, Quote Sizes, Timestamps | Provides the data for best execution analysis and can be used to determine the prevailing market price at the time of the trade. |
| Execution | Winning Counterparty LEI, Execution Price, Execution Timestamp | Populates the core fields of the post-trade report, including the price, size, and execution time of the transaction. |
| Reporting | Trade Report ID, Venue of Execution | Completes the report with the necessary metadata for submission to an APA or ARM, ensuring the trade is correctly attributed and published. |

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## What Is the Technical Standard for Data Integrity?

The technical standard for data integrity on an institutional RFQ platform is immutability. The platform’s database architecture is designed to prevent the alteration or deletion of trade records once they have been created. This is often achieved through the use of write-once-read-many (WORM) storage principles or cryptographic hashing techniques that create a verifiable chain of custody for each data point. This immutability is the ultimate defense against challenges to the accuracy or completeness of a firm’s regulatory reporting, providing a “golden source” of data that can be relied upon in any audit or investigation.

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## How Does the System Handle Reporting Deferrals?

Sophisticated RFQ platforms have built-in logic to manage the complexities of regulatory reporting deferrals. Under regimes like MiFID II, large trades or trades in illiquid instruments may be eligible for deferred publication. The platform can be configured to automatically assess each trade against the relevant size and liquidity thresholds (LIS and SSTI) and apply the appropriate deferral logic. This automated process ensures that the firm takes advantage of legitimate deferrals while still meeting its ultimate reporting obligations, reducing the manual burden on compliance staff and minimizing the risk of reporting errors.

- **Trade Assessment**
The platform checks the trade size and instrument liquidity against pre-configured regulatory thresholds.

- **Deferral Application**
If the trade qualifies, the platform flags it for deferred publication and applies the relevant time delay.

- **Automated Submission**
Once the deferral period has expired, the platform automatically submits the trade report to the designated APA.

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## References

- Harris, Larry. _Trading and Exchanges ▴ Market Microstructure for Practitioners._ Oxford University Press, 2003.

- O’Hara, Maureen. _Market Microstructure Theory._ Blackwell Publishers, 1995.

- FINRA. “Rule 5310 ▴ Best Execution and Interpositioning.” _FINRA Manual_, Financial Industry Regulatory Authority, 2023.

- U.S. Securities and Exchange Commission. “Rule 613 of Regulation NMS – Consolidated Audit Trail.” _Federal Register_, vol. 77, no. 145, 2012, pp. 45722-45819.

- European Parliament and Council. “Regulation (EU) No 600/2014 on markets in financial instruments (MiFIR).” _Official Journal of the European Union_, L 173, 12 June 2014, pp. 84-148.

- European Securities and Markets Authority. “Regulatory Technical Standards (RTS) 22 on transaction reporting.” _ESMA_, 2017.

- Lehalle, Charles-Albert, and Sophie Laruelle, editors. _Market Microstructure in Practice._ World Scientific Publishing, 2018.

- Securities and Exchange Commission. “Release No. 34-96496; File No. S7-32-22 ▴ Regulation Best Execution.” _Federal Register_, vol. 88, no. 18, 27 Jan. 2023, pp. 5440-5567.

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## Reflection

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## Calibrating Your Operational Framework

The integration of a quote solicitation protocol into a firm’s operational core prompts a deeper consideration of its entire data strategy. Viewing regulatory reporting as an output of a finely tuned execution system, a firm can begin to assess the efficiency of its internal data flows. How does information move between the front office, compliance, and technology?

Where are the points of friction or manual intervention? A truly robust framework treats every data point, from the initial quote request to the final settlement instruction, as a component in a single, coherent system designed to maximize capital efficiency while ensuring absolute compliance.

This perspective shifts the focus from merely meeting regulatory minimums to building a superior operational architecture. The data generated by the platform is a strategic asset. It provides insights into execution quality, counterparty performance, and market liquidity that can be used to refine trading strategies and improve overall performance. The ultimate goal is a state of operational fluency, where the demands of regulatory reporting are met as a seamless, automated function of a system designed for [high-fidelity execution](https://prime.greeks.live/area/high-fidelity-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

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## Glossary

<a href="https://prime.greeks.live/area/regulatory-reporting/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Regulatory Reporting

Meaning ▴ Regulatory Reporting refers to the systematic collection, processing, and submission of transactional and operational data by financial institutions to regulatory bodies in accordance with specific legal and jurisdictional mandates. </a><a href="https://prime.greeks.live/area/quote-solicitation-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Quote Solicitation Protocol

Meaning ▴ The Quote Solicitation Protocol defines the structured electronic process for requesting executable price indications from designated liquidity providers for a specific financial instrument and quantity. </a><a href="https://prime.greeks.live/area/off-book-liquidity/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Off-Book Liquidity

Meaning ▴ Off-book liquidity denotes transaction capacity available outside public exchange order books, enabling execution without immediate public disclosure. </a><a href="https://prime.greeks.live/area/data-integrity/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Data Integrity

Meaning ▴ Data Integrity ensures the accuracy, consistency, and reliability of data throughout its lifecycle. </a><a href="https://prime.greeks.live/area/consolidated-audit-trail/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Consolidated Audit Trail

Meaning ▴ The Consolidated Audit Trail (CAT) is a comprehensive, centralized database designed to capture and track every order, quote, and trade across US equity and options markets. </a><a href="https://prime.greeks.live/area/data-capture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Data Capture

Meaning ▴ Data Capture refers to the precise, systematic acquisition and ingestion of raw, real-time information streams from various market sources into a structured data repository. </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">
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## 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/audit-trail/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Audit Trail

Meaning ▴ An Audit Trail is a chronological, immutable record of system activities, operations, or transactions within a digital environment, detailing event sequence, user identification, timestamps, and specific actions. </a><a href="https://prime.greeks.live/area/transaction-reporting/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## Transaction Reporting

Meaning ▴ Transaction Reporting defines the formal process of submitting granular trade data, encompassing execution specifics and counterparty information, to designated regulatory authorities or internal oversight frameworks. </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">
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## 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/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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## 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/rfq-platform/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, futuristic apparatus featuring a central spherical processing unit flanked by dual reflective surfaces and illuminated data conduits. This system visually represents an advanced RFQ protocol engine facilitating high-fidelity execution and liquidity aggregation for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-options-rfq-liquidity-aggregation-interface.jpg)

## Rfq Platform

Meaning ▴ An RFQ Platform is an electronic system engineered to facilitate price discovery and execution for financial instruments, particularly those characterized by lower liquidity or requiring bespoke terms, by enabling an initiator to solicit competitive bids and offers from multiple designated liquidity providers. </a><a href="https://prime.greeks.live/area/high-fidelity-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated mechanical system featuring a translucent, crystalline blade-like component, embodying a Prime RFQ for Digital Asset Derivatives. This visualizes high-fidelity execution of RFQ protocols, demonstrating aggregated inquiry and price discovery within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-microstructure-1.jpg)

## High-Fidelity Execution

Meaning ▴ High-Fidelity Execution refers to the precise and deterministic fulfillment of a trading instruction or operational process, ensuring minimal deviation from the intended parameters, such as price, size, and timing. </a>

**Tags:** [Transaction Reporting](https://options.greeks.live/area/transaction-reporting/), [Data Capture](https://options.greeks.live/area/data-capture/), [Approved Publication Arrangement](https://options.greeks.live/area/approved-publication-arrangement/), [RFQ Platform](https://options.greeks.live/area/rfq-platform/), [MiFID II](https://options.greeks.live/area/mifid-ii/), [Request for Quote](https://options.greeks.live/area/request-for-quote/)	

## Discover More

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### [What Are the Primary Compliance and Auditing Advantages of Using FIX for RFQ Negotiations?](https://options.greeks.live/question/what-are-the-primary-compliance-and-auditing-advantages-of-using-fix-for-rfq-negotiations/)
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FIX for RFQ embeds an immutable, timestamped audit trail into the negotiation workflow, ensuring evidentiary certainty for compliance.

- 
### [Can the Data Captured for Reporting Also Be Used to Improve Best Execution Analysis?](https://options.greeks.live/question/can-the-data-captured-for-reporting-also-be-used-to-improve-best-execution-analysis/)
![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)

The data mandated by regulators is the architectural foundation for a system that both proves and improves best execution.

- 
### [How Do Modern Execution Management Systems Balance Discretion and Regulatory Transparency in RFQ Workflows?](https://options.greeks.live/question/how-do-modern-execution-management-systems-balance-discretion-and-regulatory-transparency-in-rfq-workflows/)
![A precise geometric prism reflects on a dark, structured surface, symbolizing institutional digital asset derivatives market microstructure. This visualizes block trade execution and price discovery for multi-leg spreads via RFQ protocols, ensuring high-fidelity execution and capital efficiency within Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-precision-execution.jpg)

An EMS architects a workflow where trader discretion and regulatory transparency are parallel, managed functions.

- 
### [What Is the Role of a Systematic Internaliser in Corporate Bond Liquidity?](https://options.greeks.live/question/what-is-the-role-of-a-systematic-internaliser-in-corporate-bond-liquidity/)
![A sophisticated digital asset derivatives RFQ engine's core components are depicted, showcasing precise market microstructure for optimal price discovery. Its central hub facilitates algorithmic trading, ensuring high-fidelity execution across multi-leg spreads. This system supports institutional prime brokerage operations, minimizing counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimizing-multi-leg-spreads-for-optimal-capital-efficiency.jpg)

A Systematic Internaliser is a capital-committing dealer that manufactures on-demand liquidity for institutional corporate bond trades.

- 
### [What Specific Documentation Is Required to Demonstrate Best Execution Compliance When Using RFQ Protocols?](https://options.greeks.live/question/what-specific-documentation-is-required-to-demonstrate-best-execution-compliance-when-using-rfq-protocols/)
![A meticulously engineered mechanism showcases a blue and grey striped block, representing a structured digital asset derivative, precisely engaged by a metallic tool. This setup illustrates high-fidelity execution within a controlled RFQ environment, optimizing block trade settlement and managing counterparty risk through robust market microstructure. It highlights a Prime RFQ intelligence layer.](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-institutional-digital-asset-derivatives-rfq-execution.jpg)

Demonstrating RFQ best execution requires an immutable, timestamped audit trail documenting the full decision-making calculus.

- 
### [How Do Large-In-Scale Waivers Affect the Choice between Rfq and Si Venues for Block Trades?](https://options.greeks.live/question/how-do-large-in-scale-waivers-affect-the-choice-between-rfq-and-si-venues-for-block-trades/)
![A central metallic RFQ engine anchors radiating segmented panels, symbolizing diverse liquidity pools and market segments. Varying shades denote distinct execution venues within the complex market microstructure, facilitating price discovery for institutional digital asset derivatives with minimal slippage and latency via high-fidelity execution.](https://options.greeks.live/wp-content/uploads/2025/07/principals-digital-asset-derivatives-rfq-protocol-execution-nexus.jpg)

LIS waivers permit discreet block trading; RFQ venues offer competitive pricing while SIs provide execution certainty.

- 
### [What Are the Core Differences between CAT and MiFID II Reporting Requirements?](https://options.greeks.live/question/what-are-the-core-differences-between-cat-and-mifid-ii-reporting-requirements/)
![A sphere split into light and dark segments, revealing a luminous core. This encapsulates the precise Request for Quote RFQ protocol for institutional digital asset derivatives, highlighting high-fidelity execution, optimal price discovery, and advanced market microstructure within aggregated liquidity pools.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-execution-framework-for-institutional-digital-asset-derivatives-request-for-quote-protocol-optimization.jpg)

CAT provides a granular order lifecycle audit for US market surveillance; MiFID II mandates broader EU trade and transaction transparency.

- 
### [What Are the Regulatory Differences Governing RFQ Systems and Dark Pools in the US?](https://options.greeks.live/question/what-are-the-regulatory-differences-governing-rfq-systems-and-dark-pools-in-the-us/)
![A central teal and dark blue conduit intersects dynamic, speckled gray surfaces. This embodies institutional RFQ protocols for digital asset derivatives, ensuring high-fidelity execution across fragmented liquidity pools. It optimizes price discovery, atomic settlement, and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-3.jpg)

Dark pools are regulated as anonymous trading venues under SEC's Reg ATS, while RFQ systems are governed by broker-dealer conduct rules.

- 
### [What Are the Primary Data Points an OMS Must Capture for MiFID II Compliance in RFQ Trading?](https://options.greeks.live/question/what-are-the-primary-data-points-an-oms-must-capture-for-mifid-ii-compliance-in-rfq-trading/)
![A symmetrical, multi-faceted structure depicts an institutional Digital Asset Derivatives execution system. Its central crystalline core represents high-fidelity execution and atomic settlement. Distinct principal entities feature API integration points, symbolizing robust RFQ protocol connectivity for cross-asset liquidity aggregation and block trades.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-microstructure.jpg)

A MiFID II-compliant OMS must capture a complete, time-stamped audit trail of the RFQ lifecycle for regulatory reporting and best execution.

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---

**Original URL:** https://options.greeks.live/question/how-does-an-rfq-platform-support-regulatory-reporting/
