# How Does MiFID II Define Best Execution for Asset Managers? ▴ Question

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

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## Concept

The Markets in Financial Instruments Directive II (MiFID II) re-architected the principle of [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) from a passive objective into an active, demonstrable, and continuous process. For an [asset manager](https://prime.greeks.live/question/what-are-the-primary-risks-for-an-asset-manager-that-fails-to-integrate-the-fx-global-code-into-its-counterparty-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), this directive establishes a fiduciary system where the obligation is to construct and maintain a decision-making framework that can consistently deliver the best possible result for clients. This system is built on evidence, data, and rigorous justification. It moves the conversation from merely achieving a good price on a single trade to proving that the entire execution workflow is calibrated for optimal outcomes across a vast matrix of possibilities.

At its core, the directive mandates that firms take “all sufficient steps” to obtain the best possible result. This phrasing represents a material elevation from the previous “all reasonable steps” standard. The term “sufficient” implies a higher, more rigorous and evidence-based standard of care. It requires an asset manager to design an [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) that is not just a static document but a dynamic operational protocol.

This protocol must be systematically monitored, reviewed, and adapted based on quantitative feedback and changing market conditions. The responsibility is to architect a system that actively seeks the optimal result, considering a wide array of [execution factors](https://prime.greeks.live/area/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) beyond just the headline price.

> The MiFID II framework transforms best execution from a simple transactional goal into a continuous, evidence-based operational system.

![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)

## What Is the Core Obligation for Asset Managers?

The central obligation for an asset manager under [MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is the creation, implementation, and maintenance of a robust [order execution policy](https://prime.greeks.live/area/order-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This policy is the foundational blueprint of the execution system. It must articulate, for each class of financial instrument, how the firm will weigh various competing factors to achieve the best outcome for its clients. The directive specifies a list of these execution factors that must be considered ▴ price, costs, speed, likelihood of execution and settlement, size, and nature of the order, among any other relevant considerations.

The asset manager must define the relative importance of these factors based on the client’s status (retail or professional), the specific characteristics of the order, and the nature of the financial instrument being traded. For professional clients, while price and cost are paramount, factors like speed and likelihood of execution can take precedence for large or illiquid orders where [market impact](https://prime.greeks.live/area/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a primary concern.

This policy must also detail the specific [execution venues](https://prime.greeks.live/area/execution-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and brokers the firm will use. This selection cannot be arbitrary; it must be supported by data and analysis demonstrating that these choices consistently contribute to best execution. The asset manager is therefore required to look beyond its existing relationships and consider a broad range of venues, including regulated markets, Multilateral Trading Facilities (MTFs), Organised Trading Facilities (OTFs), and Systematic Internalisers (SIs). The architecture of the execution process must be transparent, deliberate, and justifiable at every stage.

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![A polished spherical form representing a Prime Brokerage platform features a precisely engineered RFQ engine. This mechanism facilitates high-fidelity execution for institutional Digital Asset Derivatives, enabling private quotation and optimal price discovery](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-optimal-execution-digital-asset-derivatives.jpg)

## Strategy

Strategically, compliance with MiFID II’s best execution mandate requires [asset managers](https://prime.greeks.live/question/how-do-asset-managers-quantify-the-value-of-qualitative-research/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to build a multi-layered system of analysis, monitoring, and reporting. This system is designed to ensure the firm’s execution policies are not only theoretically sound but also practically effective. The strategy revolves around three key pillars ▴ the intelligent balancing of execution factors, a dynamic approach to venue and broker selection, and the integration of [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) as a core feedback mechanism.

![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)

## A Multi-Factor Execution Framework

The directive compels asset managers to move beyond a singular focus on price. A sophisticated strategy involves creating a decision matrix that assigns different weights to the execution factors based on specific contexts. For instance, a small, liquid equity order for a retail client would place the highest emphasis on total consideration ▴ the all-in cost combining price and explicit fees. In contrast, a large, complex derivatives order for a professional client might prioritize likelihood of execution and minimizing market impact over immediate price, justifying the use of a specialized broker or an RFQ protocol to source liquidity discreetly.

> A successful MiFID II strategy hinges on a dynamic framework that balances execution factors, rigorously analyzes venue performance, and uses TCA as a feedback loop for continuous improvement.

This strategic balancing act must be codified within the execution policy and applied consistently. It requires a deep understanding of market microstructure and the unique characteristics of different asset classes. The table below illustrates how the relative importance of execution factors might shift based on the order profile.

### Table 1 ▴ Illustrative Prioritization of MiFID II Execution Factors

| Order Profile | Primary Factor | Secondary Factor | Tertiary Factor | Strategic Rationale |
| --- | --- | --- | --- | --- |
| Small Cap Liquid Equity (Retail) | Total Consideration (Price + Costs) | Speed of Execution | Likelihood of Settlement | For retail clients, the directive emphasizes the best all-in price. Speed and certainty of settlement are also key service components. |
| Large Cap Illiquid Block (Professional) | Likelihood of Execution | Market Impact (Size/Nature) | Price | For large orders, finding sufficient liquidity without causing adverse price movements is the primary challenge. The final price is a consequence of managing this process effectively. |
| OTC Interest Rate Swap (Professional) | Price Fairness | Counterparty Risk (Costs) | Likelihood of Execution | In OTC markets, ensuring a fair price requires gathering market data and comparing with similar products. The cost of counterparty risk is a significant consideration. |
| High-Frequency Arbitrage Strategy | Speed of Execution | Costs (Fees) | Price | For latency-sensitive strategies, the speed of order placement and confirmation is the most critical factor for success. |

![A precision-engineered blue mechanism, symbolizing a high-fidelity execution engine, emerges from a rounded, light-colored liquidity pool component, encased within a sleek teal institutional-grade shell. This represents a Principal's operational framework for digital asset derivatives, demonstrating algorithmic trading logic and smart order routing for block trades via RFQ protocols, ensuring atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-os-core-algorithmic-execution-engine.jpg)

## Dynamic Venue and Broker Analysis

MiFID II requires that an asset manager’s choice of execution venues is not static. A firm must monitor the effectiveness of its chosen venues and brokers and be prepared to alter its arrangements if the data shows better results could be achieved elsewhere. This introduces a competitive dynamic where venues and brokers must continuously prove their value. The strategic implementation of this requirement involves a systematic, data-driven review process.

- **Data Collection** ▴ Asset managers must ingest and analyze [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) data. This includes public reports from venues (RTS 27 reports) and the firm’s own TCA data. 

- **Performance Measurement** ▴ The firm must establish key performance indicators (KPIs) for each venue and broker, aligned with the execution factors. This could include metrics like price improvement versus a benchmark, rejection rates, or execution latency. 

- **Comparative Analysis** ▴ The performance of different venues must be compared on a like-for-like basis for similar types of orders and instruments. This analysis forms the basis for the annual [RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) report, which discloses the top five execution venues used by the firm. 

- **Policy Review** ▴ The findings from this analysis must feed directly into a formal review of the [order execution](https://prime.greeks.live/area/order-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) policy, leading to adjustments in venue selection or order routing logic. 

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![A precision mechanism with a central circular core and a linear element extending to a sharp tip, encased in translucent material. This symbolizes an institutional RFQ protocol's market microstructure, enabling high-fidelity execution and price discovery for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-rfq-execution-engine-microstructure-facilitating-optimal-price-discovery-and-best-execution.jpg)

## Execution

The execution of a MiFID II best [execution framework](https://prime.greeks.live/area/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a matter of operationalizing the firm’s strategy through concrete governance, data analysis, and reporting mechanisms. It is where policy is translated into auditable action. This requires robust technological infrastructure, clear internal responsibilities, and a commitment to transparency. The entire system is designed to create a defensible audit trail that demonstrates “all sufficient steps” were indeed taken.

![A polished, light surface interfaces with a darker, contoured form on black. This signifies the RFQ protocol for institutional digital asset derivatives, embodying price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-interface.jpg)

## How Is the Governance Framework Structured?

A compliant execution framework is built upon a clear governance structure. This is not simply a compliance function but a cross-departmental system involving the front office, risk, compliance, and technology teams. The objective is to create a continuous feedback loop.

- **Policy Establishment** ▴ A dedicated committee, often called a Best Execution or Order Placement Committee, is responsible for defining and approving the firm’s order execution policy. This committee should include representation from portfolio management, trading, and compliance to ensure all perspectives are considered. 

- **System Implementation** ▴ The trading desk, supported by the technology team, implements the execution policy through the firm’s Order Management System (OMS) and Execution Management System (EMS). This includes configuring smart order routers (SORs) to reflect the firm’s venue preferences and factor weightings. 

- **Monitoring and TCA** ▴ The core of the execution process is ongoing monitoring through [Transaction Cost](https://prime.greeks.live/area/transaction-cost/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Analysis (TCA). Post-trade TCA reports are systematically generated to measure execution performance against various benchmarks (e.g. Arrival Price, VWAP). This quantitative analysis provides the evidence needed to assess the effectiveness of the policy. 

- **Review and Remediation** ▴ The Best Execution Committee regularly reviews the TCA reports and other execution quality data. Where performance is suboptimal or new venues offer better outcomes, the committee is responsible for directing changes to the execution policy and its implementation. This cycle of “policy -> execution -> monitoring -> review” is fundamental. 

![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)

## The Data Reporting Architecture RTS 27 and RTS 28

A significant part of the execution framework is the data reporting architecture mandated by the [Regulatory Technical Standards](https://prime.greeks.live/area/regulatory-technical-standards/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (RTS). While the requirement for venues to produce RTS 27 reports has been suspended to reduce complexity, the obligation for investment firms to analyze execution quality and, until recent reviews, produce RTS 28 reports, remains a core part of the system’s logic. The RTS 28 report, in particular, serves as the primary public disclosure of a firm’s execution practices.

> The operational execution of MiFID II best execution relies on a robust governance cycle and a data architecture capable of producing detailed reports like RTS 28.

The RTS 28 report requires firms to publish an annual summary of their execution analysis, including their top five execution venues for each class of financial instrument. This report is a direct output of the firm’s internal monitoring process. The table below provides a simplified example of the quantitative data required for a single instrument class in an RTS 28 report.

### Table 2 ▴ Sample RTS 28 Data for Equities ▴ Tick Size Liquidity Band 5 & 6

| Execution Venue | Proportion of Volume | Proportion of Orders | Percentage of Passive Orders | Percentage of Aggressive Orders | Percentage of Directed Orders |
| --- | --- | --- | --- | --- | --- |
| London Stock Exchange (XLON) | 45% | 30% | 60% | 40% | 5% |
| Cboe BXE (BATE) | 25% | 40% | 75% | 25% | 2% |
| Broker A (SI) | 15% | 15% | N/A | N/A | 90% |
| Turquoise (TRQX) | 10% | 10% | 50% | 50% | 1% |
| Aquis Exchange (AQXE) | 5% | 5% | 80% | 20% | 2% |

Alongside this quantitative data, the firm must provide a qualitative summary of its execution analysis. This summary explains how the firm monitored execution quality and the conclusions it drew. It must detail how the choice of venues and brokers delivered the best possible result, referencing the specific execution factors and the firm’s overall strategy. This combination of quantitative evidence and qualitative explanation is the ultimate expression of the MiFID II best execution system in practice.

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## References

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

- Tradeweb. “Best Execution Under MiFID II and the Role of Transaction Cost Analysis in the Fixed Income Markets.” Tradeweb, 14 June 2017.

- Linklaters. “MiFID II/ MIFIR and Asset Management In a nutshell.” Linklaters, 2017.

- European Securities and Markets Authority. “ESMA public statement on reporting requirements under RTS 28.” ESMA, 13 Feb. 2024.

- Nikko Asset Management Europe Ltd. “RTS28 – Quantitative and Qualitative Reports.” Nikko AM, Apr. 2018.

- Financial Conduct Authority. “COBS 11.2A Best execution ▴ MiFID provisions.” FCA Handbook, 3 Jan. 2018.

- DLA Piper. “ESMA publishes statement on reporting requirements under RTS 28 of MiFID II.” DLA Piper, 20 Feb. 2024.

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## Reflection

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## Is Your Execution Framework an Asset or a Liability?

The architecture mandated by MiFID II presents a fundamental question to every asset manager. Is your best execution framework merely a compliance apparatus, a cost center designed to satisfy regulatory obligations? Or is it a strategic asset, a system of intelligence that generates a tangible competitive advantage? The data, analysis, and governance loops required by the directive can be viewed as a burden.

A more advanced perspective sees them as the components of an operational engine designed for continuous performance optimization. The process of systematically evaluating venues, analyzing costs, and measuring market impact generates a proprietary data asset. When harnessed correctly, this asset provides deep insights into liquidity, routing efficiency, and broker performance. It allows a firm to move from reactive compliance to proactive execution design, architecting a workflow that structurally enhances returns and minimizes risk for clients. The ultimate reflection is to assess whether your firm’s implementation is simply fulfilling the letter of the law or truly embracing its systemic intent to build a superior execution capability.

![An Execution Management System module, with intelligence layer, integrates with a liquidity pool hub and RFQ protocol component. This signifies atomic settlement and high-fidelity execution within an institutional grade Prime RFQ, ensuring capital efficiency for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-orchestrating-institutional-digital-asset-derivatives-rfq-protocols-for-optimal-execution.jpg)

## Glossary

<a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
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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/question/what-are-the-primary-risks-for-an-asset-manager-that-fails-to-integrate-the-fx-global-code-into-its-counterparty-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision optical system with a reflective lens embodies the Prime RFQ intelligence layer. Gray and green planes represent divergent RFQ protocols or multi-leg spread strategies for institutional digital asset derivatives, enabling high-fidelity execution and optimal price discovery within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-intelligent-core-driving-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-across-diverse-liquidity-pools-for-optimal-price-discovery.jpg)

## Asset Manager

Failing to integrate the FX Global Code exposes an asset manager to systemic operational, reputational, and execution integrity failures. </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">
![Beige cylindrical structure, with a teal-green inner disc and dark central aperture. This signifies an institutional grade Principal OS module, a precise RFQ protocol gateway for high-fidelity execution and optimal liquidity aggregation of digital asset derivatives, critical for quantitative analysis and market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/principal-os-rfq-engine-for-digital-asset-derivatives-high-fidelity-execution-optimal-liquidity-aggregation.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/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## 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/order-execution-policy/?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)

## Order Execution Policy

Meaning ▴ An Order Execution Policy defines the systematic procedures and criteria governing how an institutional trading desk processes and routes client or proprietary orders across various liquidity venues. </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 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)

## 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/market-impact/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A complex, intersecting arrangement of sleek, multi-colored blades illustrates institutional-grade digital asset derivatives trading. This visual metaphor represents a sophisticated Prime RFQ facilitating RFQ protocols, aggregating dark liquidity, and enabling high-fidelity execution for multi-leg spreads, optimizing capital efficiency and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/sophisticated-multi-asset-rfq-architecture-visualizing-institutional-digital-derivatives-execution-liquidity-aggregation-and-prime-os-orchestration-for-high-fidelity-performance.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/execution-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract geometric planes delineate distinct institutional digital asset derivatives liquidity pools. Stark contrast signifies market microstructure shift via advanced RFQ protocols, ensuring high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-execution-protocol-integrating-rfq-liquidity-and-advanced-market-microstructure.jpg)

## Execution Venues

Meaning ▴ Execution Venues are regulated marketplaces or bilateral platforms where financial instruments are traded and orders are matched, encompassing exchanges, multilateral trading facilities, organized trading facilities, and over-the-counter desks. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, spherical, off-white device with a glowing cyan lens symbolizes an Institutional Grade Prime RFQ Intelligence Layer. It drives High-Fidelity Execution of Digital Asset Derivatives via RFQ Protocols, enabling Optimal Liquidity Aggregation and Price Discovery for Market Microstructure Analysis](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimal-execution-1.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/question/how-do-asset-managers-quantify-the-value-of-qualitative-research/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A deconstructed mechanical system with segmented components, revealing intricate gears and polished shafts, symbolizing the transparent, modular architecture of an institutional digital asset derivatives trading platform. This illustrates multi-leg spread execution, RFQ protocols, and atomic settlement processes](https://options.greeks.live/wp-content/uploads/2025/07/deconstructed-principal-trading-system-revealing-core-mechanics-of-digital-asset-derivatives-execution.jpg)

## Asset Managers

Asset managers quantify qualitative research by architecting systems to translate subjective insights into structured, scorable data for integration into valuation models. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, white, semi-spherical Principal's operational framework opens to precise internal FIX Protocol components. A luminous, reflective blue sphere embodies an institutional-grade digital asset derivative, symbolizing optimal price discovery and a robust liquidity pool](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-5.jpg)

## Execution Quality

Meaning ▴ Execution Quality quantifies the efficacy of an order's fill, assessing how closely the achieved trade price aligns with the prevailing market price at submission, alongside consideration for speed, cost, and market impact. </a><a href="https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## 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><a href="https://prime.greeks.live/area/order-execution/?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)

## Order Execution

Meaning ▴ Order Execution defines the precise operational sequence that transforms a Principal's trading intent into a definitive, completed transaction within a digital asset market. </a><a href="https://prime.greeks.live/area/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Execution Framework

Meaning ▴ An Execution Framework represents a comprehensive, programmatic system designed to facilitate the systematic processing and routing of trading orders across various market venues, optimizing for predefined objectives such as price, speed, or minimized market impact. </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">
![Smooth, layered surfaces represent a Prime RFQ Protocol architecture for Institutional Digital Asset Derivatives. They symbolize integrated Liquidity Pool aggregation and optimized Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/market-microstructure-rfq-protocols-for-digital-asset-derivatives.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/regulatory-technical-standards/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Regulatory Technical Standards

Meaning ▴ Regulatory Technical Standards, or RTS, are legally binding technical specifications developed by European Supervisory Authorities to elaborate on the details of legislative acts within the European Union's financial services framework. </a>

**Tags:** [RTS 28](https://options.greeks.live/area/rts-28/), [Transaction Cost Analysis](https://options.greeks.live/area/transaction-cost-analysis/), [Order Execution](https://options.greeks.live/area/order-execution/), [Financial Conduct Authority](https://options.greeks.live/area/financial-conduct-authority/), [MiFID II](https://options.greeks.live/area/mifid-ii/), [Best Execution](https://options.greeks.live/area/best-execution/)	

## Discover More

- 
### [How Did MiFID II Redefine the Best Execution Obligation for Investment Firms?](https://options.greeks.live/question/how-did-mifid-ii-redefine-the-best-execution-obligation-for-investment-firms/)
![Internal components of a Prime RFQ execution engine, with modular beige units, precise metallic mechanisms, and complex data wiring. This infrastructure supports high-fidelity execution for institutional digital asset derivatives, facilitating advanced RFQ protocols, optimal liquidity aggregation, multi-leg spread trading, and efficient price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-rfq-engine-for-institutional-digital-asset-options.jpg)

MiFID II redefined best execution by shifting the obligation from procedural adherence to a provable, data-driven engineering discipline.

- 
### [How Does a Firm’s Choice of Execution Venues Impact Its Ability to Demonstrate Best Execution?](https://options.greeks.live/question/how-does-a-firms-choice-of-execution-venues-impact-its-ability-to-demonstrate-best-execution/)
![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)

A firm's venue selection directly dictates its ability to prove best execution by shaping access to liquidity and controlling transaction costs.

- 
### [What Are the Regulatory Implications of Counterparty Selection and Best Execution under MiFID II?](https://options.greeks.live/question/what-are-the-regulatory-implications-of-counterparty-selection-and-best-execution-under-mifid-ii/)
![A sleek, spherical, off-white device with a glowing cyan lens symbolizes an Institutional Grade Prime RFQ Intelligence Layer. It drives High-Fidelity Execution of Digital Asset Derivatives via RFQ Protocols, enabling Optimal Liquidity Aggregation and Price Discovery for Market Microstructure Analysis.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimal-execution-1.jpg)

MiFID II mandates a data-driven system where counterparty viability and execution factors forge optimal client outcomes.

- 
### [How Does MiFID II Define the “All Sufficient Steps” Mandate?](https://options.greeks.live/question/how-does-mifid-ii-define-the-all-sufficient-steps-mandate/)
![An abstract composition featuring two overlapping digital asset liquidity pools, intersected by angular structures representing multi-leg RFQ protocols. This visualizes dynamic price discovery, high-fidelity execution, and aggregated liquidity within institutional-grade crypto derivatives OS, optimizing capital efficiency and mitigating counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-optimizing-aggregated-liquidity-and-multi-leg-execution-via-advanced-market-microstructure.jpg)

MiFID II's "all sufficient steps" mandate requires firms to build a provable, data-driven system for continuously optimizing client execution outcomes.

- 
### [How Do Regulators Define the “All Sufficient Steps” in Best Execution?](https://options.greeks.live/question/how-do-regulators-define-the-all-sufficient-steps-in-best-execution/)
![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)

Regulators define "all sufficient steps" as a firm's obligation to create a dynamic, multi-faceted process for achieving the best possible client outcome.

- 
### [How Does MiFID II Impact Best Execution Requirements for Corporate Bonds?](https://options.greeks.live/question/how-does-mifid-ii-impact-best-execution-requirements-for-corporate-bonds/)
![A central core represents a Prime RFQ engine, facilitating high-fidelity execution. Transparent, layered structures denote aggregated liquidity pools and multi-leg spread strategies. Internal patterns symbolize market microstructure data streams, enabling algorithmic pricing and optimal price discovery for institutional digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-for-institutional-digital-asset-derivatives-execution.jpg)

MiFID II mandates a shift in corporate bond trading from subjective effort to a data-driven, auditable process of proving superior execution.

- 
### [What Are the Regulatory Differences for Proving Best Execution under MiFID II?](https://options.greeks.live/question/what-are-the-regulatory-differences-for-proving-best-execution-under-mifid-ii/)
![Central metallic hub connects beige conduits, representing an institutional RFQ engine for digital asset derivatives. It facilitates multi-leg spread execution, ensuring atomic settlement, optimal price discovery, and high-fidelity execution within a Prime RFQ for capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-protocol-execution-hub.jpg)

MiFID II demands a shift from procedural compliance to proving superior outcomes through a dynamic, data-driven execution framework.

- 
### [How Does MiFID II Define the Best Execution Factors for Investment Firms?](https://options.greeks.live/question/how-does-mifid-ii-define-the-best-execution-factors-for-investment-firms/)
![Translucent spheres, embodying institutional counterparties, reveal complex internal algorithmic logic. Sharp lines signify high-fidelity execution and RFQ protocols, connecting these liquidity pools. The reflective surface depicts digital asset derivatives market microstructure, facilitating optimal price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-optimal-execution-engine.jpg)

MiFID II defines best execution as a mandate for firms to use all sufficient steps to obtain the optimal outcome across a range of factors.

- 
### [How Does MiFID II Specifically Define the Requirements for Best Execution Reporting?](https://options.greeks.live/question/how-does-mifid-ii-specifically-define-the-requirements-for-best-execution-reporting/)
![A precise, multi-faceted geometric structure represents institutional digital asset derivatives RFQ protocols. Its sharp angles denote high-fidelity execution and price discovery for multi-leg spread strategies, symbolizing capital efficiency and atomic settlement within a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-microstructure-framework.jpg)

MiFID II's reporting defines a data-driven framework for proving best execution, demanding systematic internal analysis over public disclosure.

---

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---

**Original URL:** https://options.greeks.live/question/how-does-mifid-ii-define-best-execution-for-asset-managers/
