# How Does MiFID II Define Best Execution for Request for Quote Trades? ▴ Question

**Published:** 2025-08-07
**Categories:** Question

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![A sleek, symmetrical digital asset derivatives component. It represents an RFQ engine for high-fidelity execution of multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-for-optimized-market-microstructure.jpg)

![Polished metallic rods, spherical joints, and reflective blue components within beige casings, depict a Crypto Derivatives OS. This engine drives institutional digital asset derivatives, optimizing RFQ protocols for high-fidelity execution, robust price discovery, and capital efficiency within complex market microstructure via algorithmic trading](https://options.greeks.live/wp-content/uploads/2025/07/optimized-rfq-protocol-engine-driving-institutional-digital-asset-derivatives-market-microstructure-execution.jpg)

## Concept

The Markets in [Financial Instruments](https://prime.greeks.live/area/financial-instruments/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Directive II (MiFID II) establishes a comprehensive regulatory framework that governs how investment firms execute orders on behalf of their clients. A central pillar of this framework is the obligation of best execution, which mandates that firms 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 on a consistent basis. This principle extends across various execution methodologies, including the Request for Quote (RFQ) protocol, a dominant mechanism for sourcing liquidity in less liquid or over-the-counter (OTC) markets. The application of best execution principles to RFQ trades presents a unique set of challenges and considerations, moving the conversation from a simple price-taking exercise to a structured, evidence-based process of due diligence.

![Intersecting muted geometric planes, with a central glossy blue sphere. This abstract visualizes market microstructure for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-5.jpg)

## The Core Obligation in the RFQ Context

At its heart, the [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) requirement compels a firm to consider a range of “[execution factors](https://prime.greeks.live/area/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” when carrying out a client’s order. These factors include not only price but also costs, speed, likelihood of execution and settlement, size, and any other consideration relevant to the order. For RFQ-based trades, this means the process of soliciting quotes is subject to rigorous standards. A firm cannot simply accept the first or most convenient quote.

It must have a systematic process for selecting counterparties from which to request quotes, evaluating the responses received, and justifying the final execution decision. This process must be formalized within the firm’s [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and be demonstrable to regulators and clients alike.

The directive distinguishes between client classifications, primarily retail and professional. For retail clients, the best possible result is determined mainly by the total consideration, representing the price of the financial instrument and the costs of execution. The framework for [professional clients](https://prime.greeks.live/area/professional-clients/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) allows for a more nuanced balancing of the various execution factors, where considerations like speed or likelihood of execution might justifiably take precedence over the absolute best price in certain market conditions. In the [RFQ](https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) world, which is predominantly the domain of professional clients and institutional participants, this flexibility is critical.

However, it also places a greater burden on the firm to articulate and document the rationale behind its [execution strategy](https://prime.greeks.live/area/execution-strategy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The firm’s execution policy must clearly explain how it will weigh these factors for different instrument classes and market scenarios.

![A translucent teal dome, brimming with luminous particles, symbolizes a dynamic liquidity pool within an RFQ protocol. Precisely mounted metallic hardware signifies high-fidelity execution and the core intelligence layer for institutional digital asset derivatives, underpinned by granular market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-intelligence-layer.jpg)

## From Legitimate Reliance to All Sufficient Steps

Under the preceding MiFID I framework, the application of best execution to RFQ trades often hinged on the concept of “legitimate reliance.” This principle suggested that best execution obligations were only triggered if the client was reasonably relying on the firm to protect its interests in the transaction. MiFID II moved beyond this interpretation, establishing a more concrete and universally applicable standard. The mandate to take “all [sufficient steps](https://prime.greeks.live/area/sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” removes ambiguity and firmly places the onus on the investment firm to design and implement a robust [best execution framework](https://prime.greeks.live/area/best-execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), regardless of the client’s perceived sophistication or the bilateral nature of the RFQ process.

This shift has profound implications. It transforms the RFQ from a simple bilateral negotiation into a structured process that must be embedded within a firm’s overall order handling and execution policy. The firm must be able to demonstrate, through data and documentation, that its approach to RFQ trading is designed to achieve the best possible outcome for the client consistently. This includes maintaining records of the quotes requested, the quotes received, and the justification for the chosen execution.

The focus is on the quality of the process as the primary determinant of whether the best execution obligation has been met. A favorable outcome on a single trade is insufficient; the framework must be sound and consistently applied.

> MiFID II reframes RFQ trading from a bilateral negotiation to a structured, evidence-based process where the investment firm must prove it consistently takes all sufficient steps to secure the best client outcome.

The directive also introduces enhanced transparency and reporting requirements that reinforce the best execution obligation. Firms are required to publish annual reports detailing their top five execution venues (including brokers and market makers used in RFQ scenarios) for each class of financial instrument, along with information on the quality of execution obtained. This public disclosure requirement creates a powerful incentive for firms to rigorously monitor and optimize their execution arrangements, as their performance is subject to both regulatory scrutiny and competitive comparison. For RFQ-based flow, this means firms must systematically track data on their counterparty performance, including metrics like response times, fill rates, and [execution price](https://prime.greeks.live/area/execution-price/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) relative to market benchmarks, to substantiate their choices.

![A stylized spherical system, symbolizing an institutional digital asset derivative, rests on a robust Prime RFQ base. Its dark core represents a deep liquidity pool for algorithmic trading](https://options.greeks.live/wp-content/uploads/2025/08/institutional-grade-rfq-protocol-engine-facilitating-best-execution-and-liquidity-aggregation-for-digital-asset-derivatives.jpg)

![Sleek, abstract system interface with glowing green lines symbolizing RFQ pathways and high-fidelity execution. This visualizes market microstructure for institutional digital asset derivatives, emphasizing private quotation and dark liquidity within a Prime RFQ framework, enabling best execution and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-for-institutional-digital-asset-derivatives.jpg)

## Strategy

Developing a compliant and effective strategy for best execution in [RFQ trades](https://prime.greeks.live/area/rfq-trades/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) under MiFID II requires a fundamental integration of policy, process, and technology. It is a strategic imperative that extends beyond mere compliance, touching upon client relationships, operational efficiency, and competitive positioning. The core of the strategy involves creating a defensible and repeatable process that can withstand regulatory scrutiny and consistently deliver superior [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for clients. This involves a multi-layered approach that addresses counterparty selection, quote evaluation, and post-trade analysis.

![A metallic, modular trading interface with black and grey circular elements, signifying distinct market microstructure components and liquidity pools. A precise, blue-cored probe diagonally integrates, representing an advanced RFQ engine for granular price discovery and atomic settlement of multi-leg spread strategies in institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-system-facilitating-high-fidelity-execution-price-discovery.jpg)

## Architecting a Compliant Execution Policy

The foundational document for any MiFID II best execution strategy is the firm’s [order execution policy](https://prime.greeks.live/area/order-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This document is not a static disclosure but a dynamic operational blueprint. For RFQ workflows, the policy must articulate, with sufficient detail, the process by which the firm will ensure best execution. This begins with the criteria for selecting [liquidity providers](https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to include in an RFQ auction.

A strategic approach to counterparty selection involves several key elements:

- **Systematic Vetting** ▴ Firms must establish and document a formal process for approving and reviewing the counterparties they will solicit quotes from. This process should assess the counterparty’s financial stability, their history of providing competitive pricing, and their reliability in responding to requests.

- **Dynamic Management** ▴ The list of potential counterparties should not be static. The strategy must incorporate a periodic review of each counterparty’s performance, using quantitative data to add or remove firms from the approved list. Factors to consider include response rates, the competitiveness of their quotes, and post-trade settlement efficiency.

- **Appropriate Breadth** ▴ The policy should define the typical number of counterparties to be included in an RFQ for a given instrument type and trade size. While [MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) does not prescribe a specific number, a firm must be able to justify that its approach is sufficient to create a competitive pricing environment and achieve the best result. Sending an RFQ to a single dealer without justification would likely fail to meet the standard.

The policy must also clearly define the relative importance of the execution factors for different types of clients and financial instruments. While price and cost are the primary determinants for retail clients, the strategy for professional clients can be more complex. The table below illustrates how a firm might strategically weigh execution factors for different scenarios within an RFQ context.

### Table 1 ▴ Strategic Weighting of Execution Factors in RFQ Scenarios

| Scenario | Primary Factor | Secondary Factors | Strategic Rationale |
| --- | --- | --- | --- |
| Large-cap FX Option (Liquid) | Price | Costs, Speed | In a liquid market with high price transparency, securing the most competitive price is the dominant consideration. Low latency in receiving and executing quotes is also valuable. |
| Illiquid Corporate Bond | Likelihood of Execution | Price, Size | For instruments that trade infrequently, the certainty of completing the trade is paramount. The strategy focuses on identifying counterparties with known axes of interest, even if the price is slightly less competitive than a theoretical benchmark. |
| Complex, Multi-leg Derivative | Size / Likelihood of Execution | Price, Counterparty Risk | The ability of a single counterparty to quote and execute the entire complex structure without information leakage is the primary goal. The best price from a dealer unable to handle the full size is irrelevant. |
| Urgent Hedge Execution | Speed | Likelihood of Execution, Price | When a trade is required to mitigate a rapidly developing market risk, the speed of receiving a firm quote and executing the trade becomes the most critical factor, justifying a potential trade-off on price. |

![A polished, dark teal institutional-grade mechanism reveals an internal beige interface, precisely deploying a metallic, arrow-etched component. This signifies high-fidelity execution within an RFQ protocol, enabling atomic settlement and optimized price discovery for institutional digital asset derivatives and multi-leg spreads, ensuring minimal slippage and robust capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/quantitative-finance-driven-rfq-workflow-for-best-execution-in-digital-assets.jpg)

## The Quote Evaluation and Execution Process

Once quotes are received, the firm’s strategy must dictate a systematic evaluation process. This cannot be an ad-hoc decision made by a trader. The process should be integrated into the firm’s Order [Management System](https://prime.greeks.live/question/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (OMS) or Execution Management System (EMS) to ensure consistency and create an auditable record.

The evaluation should compare the received quotes against each other and, where possible, against independent market data sources. For many OTC instruments, reliable pre-trade benchmarks may be scarce, which elevates the importance of the competitive RFQ process itself as the primary mechanism for price discovery.

> A robust MiFID II strategy transforms the RFQ from a simple price request into a documented, multi-dealer auction designed to consistently prove best execution.

The strategy must also account for situations where the best-priced quote is not selected. For instance, a firm might choose a slightly inferior price from a counterparty with a superior settlement record to minimize operational risk. Such decisions are permissible under MiFID II, but they must be explicitly justified and documented at the time of the trade. The execution policy should outline the specific circumstances under which such deviations are considered acceptable.

![Two sharp, teal, blade-like forms crossed, featuring circular inserts, resting on stacked, darker, elongated elements. This represents intersecting RFQ protocols for institutional digital asset derivatives, illustrating multi-leg spread construction and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-best-execution.jpg)

## Post-Trade Monitoring and Transaction Cost Analysis (TCA)

A critical component of any MiFID II best execution strategy is a robust post-trade monitoring system. Firms must continuously analyze the quality of the execution they are achieving to demonstrate compliance and identify areas for improvement. This is where [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) ([TCA](https://prime.greeks.live/area/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)) becomes indispensable.

For RFQ trades, TCA involves more than just comparing the execution price to a benchmark. A comprehensive TCA strategy for RFQ workflows would analyze:

- **Counterparty Performance Metrics** ▴ Systematically tracking metrics for each liquidity provider, such as the mean and median time taken to respond to a quote request, the percentage of requests that receive a quote, and the fill percentage for executed trades.

- **Price Competitiveness** ▴ Analyzing the spread of the winning quote versus the other quotes received (the “cover” price). Consistently executing at prices that are only marginally better than the next-best quote indicates a competitive auction process.

- **Rejection Analysis** ▴ Investigating why certain counterparties may be rejecting a high volume of requests, which could indicate an issue with the firm’s targeting of liquidity.

- **Benchmarking** ▴ Where available, comparing execution prices against post-trade benchmarks or evaluated pricing services to provide an independent measure of execution quality.

The insights generated from this analysis feed back into the strategy, enabling the firm to refine its counterparty lists, adjust its RFQ auction parameters, and ultimately improve the outcomes it delivers to clients. This continuous feedback loop is the hallmark of a dynamic and effective best execution strategy. 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, is a direct output of this analytical process, making robust TCA a non-negotiable element of the strategic framework.

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![A sleek, metallic platform features a sharp blade resting across its central dome. This visually represents the precision of institutional-grade digital asset derivatives RFQ execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-1.jpg)

## Execution

The execution of a MiFID II-compliant best [execution framework](https://prime.greeks.live/area/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for RFQ trades is a matter of operational precision and technological integration. It requires translating the strategic principles outlined in the firm’s policy into a concrete, auditable, and efficient workflow. This involves the careful configuration of trading systems, the systematic collection and analysis of data, and the establishment of clear governance and oversight procedures. The ultimate goal is to create a system where the demonstration of best execution is not a post-trade reconstruction effort but an intrinsic output of the trading process itself.

![A dynamic composition depicts an institutional-grade RFQ pipeline connecting a vast liquidity pool to a split circular element representing price discovery and implied volatility. This visual metaphor highlights the precision of an execution management system for digital asset derivatives via private quotation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-pipeline-for-precise-price-discovery-and-volatility-surface-analysis.jpg)

## System Integration and Workflow Automation

Modern institutional trading relies on a sophisticated stack of technology, typically comprising an Order Management System (OMS) and an Execution Management System (EMS). Effectively implementing a best execution policy for RFQs requires that these systems are configured to support and enforce the defined workflow. The process begins when a client order is received and entered into the OMS.

The execution workflow should proceed through the following automated or system-guided steps:

- **Order Staging** ▴ The order is staged within the EMS, where pre-trade checks are performed. The system should automatically flag the order with its relevant attributes (e.g. client type, instrument class, notional value) which will determine the specific handling policy.

- **Counterparty Selection** ▴ Based on pre-defined rules aligned with the execution policy, the EMS should suggest or, in some cases, mandate a list of counterparties for the RFQ. These rules can be sophisticated, taking into account factors like counterparty tiering, historical performance, and even current market conditions.

- **RFQ Dissemination** ▴ The trader initiates the RFQ, and the EMS sends out the request simultaneously to the selected counterparties, typically via standardized protocols like FIX (Financial Information eXchange). The system logs the exact time the request is sent to each counterparty.

- **Quote Aggregation and Analysis** ▴ As quotes are returned, the EMS aggregates them in a centralized blotter. The system should display the quotes in real-time, highlighting the best price and calculating the spread between the best and subsequent quotes. Crucially, it should also timestamp the receipt of each quote, allowing for the calculation of response times.

- **Execution and Justification** ▴ The trader executes the trade, typically by clicking on the desired quote within the EMS. If the selected quote is not the best-priced one, the system should prompt the trader to provide a justification from a pre-defined list of reasons (e.g. ‘Better Settlement Certainty’, ‘Larger Size Available’) or a free-text entry. This creates a contemporaneous audit trail.

- **Data Capture for TCA** ▴ Upon execution, the system must automatically capture all relevant data points for subsequent analysis. This data forms the foundation of the post-trade monitoring process.

![Abstract structure combines opaque curved components with translucent blue blades, a Prime RFQ for institutional digital asset derivatives. It represents market microstructure optimization, high-fidelity execution of multi-leg spreads via RFQ protocols, ensuring best execution and capital efficiency across liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-optimizing-market-microstructure-for-high-fidelity-execution-best-execution-price-discovery-across-liquidity-pools-and-prime-os.jpg)

## Quantitative Monitoring and Data Analysis

The bedrock of a defensible best execution process is data. Firms must move beyond subjective assessments and implement a quantitative framework for monitoring execution quality. This requires the systematic capture and analysis of a wide range of data points associated with each RFQ. The table below details the critical data fields that must be captured for each RFQ event to facilitate robust TCA.

### Table 2 ▴ Critical Data Points for RFQ Transaction Cost Analysis

| Data Point | Description | Analytical Purpose |
| --- | --- | --- |
| RFQ Sent Timestamp | The precise time the RFQ was sent to each counterparty. | Establishes the starting point for measuring response latency. |
| Quote Received Timestamp | The precise time each counterparty’s quote was received. | Used to calculate response time for each counterparty. |
| Quoted Price | The bid and offer price returned by each counterparty. | Core data for price comparison and spread analysis. |
| Execution Timestamp | The time the trade was executed. | Defines the moment of execution for market data comparison. |
| Execution Price | The final price at which the trade was executed. | The primary metric for evaluating execution quality. |
| Winning Counterparty | The counterparty with whom the trade was executed. | Allows for performance tracking of individual liquidity providers. |
| Cover Price | The price of the second-best quote received. | Measures the competitiveness of the winning quote. |
| Deviation Justification Code | A code or text explaining why the best-priced quote was not chosen. | Provides a critical audit trail for justifying execution decisions. |

This data can then be used to generate a variety of reports and dashboards that provide insight into the effectiveness of the firm’s execution strategy. For example, a firm can produce a quarterly “Counterparty Scorecard” that ranks liquidity providers based on a composite score derived from their average response time, quote competitiveness, and fill rates. This quantitative evidence is invaluable for discussions with counterparties and for justifying the composition of the firm’s approved list to regulators.

![A sophisticated mechanism features a segmented disc, indicating dynamic market microstructure and liquidity pool partitioning. This system visually represents an RFQ protocol's price discovery process, crucial for high-fidelity execution of institutional digital asset derivatives and managing counterparty risk within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/advanced-digital-asset-derivatives-rfq-liquidity-aggregation-system.jpg)

## Governance and the Role of the Execution Committee

Technology and data alone are insufficient. A robust governance framework is essential to oversee the best execution process. Many firms establish a Best Execution Committee, composed of senior personnel from trading, compliance, risk, and operations. This committee is typically responsible for:

- **Policy Ownership** ▴ Reviewing and approving the firm’s order execution policy on at least an annual basis, or more frequently if there are significant changes in market structure or regulation.

- **Performance Review** ▴ Analyzing the TCA reports and counterparty scorecards to assess whether the firm is consistently achieving best execution for its clients.

- **Exception Handling** ▴ Investigating any significant breaches of the execution policy or instances of poor execution to identify root causes and implement corrective actions.

- **Regulatory Reporting** ▴ Overseeing the production and publication of the annual RTS 28 report, ensuring its accuracy and completeness.

> Demonstrating best execution for RFQs under MiFID II is achieved when a firm’s technology, data analytics, and governance structures coalesce into a single, auditable system of record.

The execution of a MiFID II-compliant framework is an ongoing, iterative process. The insights gained from quantitative analysis and the oversight of the governance committee should feed back into the continuous refinement of the firm’s execution policy, its trading technology, and its relationships with its liquidity providers. This creates a virtuous cycle of monitoring, analysis, and improvement that not only ensures [regulatory compliance](https://prime.greeks.live/area/regulatory-compliance/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) but also delivers a tangible competitive advantage through superior execution quality.

![Abstract geometric forms depict institutional digital asset derivatives trading. A dark, speckled surface represents fragmented liquidity and complex market microstructure, interacting with a clean, teal triangular Prime RFQ structure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-system-for-prime-os-liquidity-pool.jpg)

## References

- European Securities and Markets Authority. (2017). Guidelines on MiFID II best execution requirements. ESMA/2017/SGC/231.

- Financial Conduct Authority. (2017). Markets in Financial Instruments Directive II Implementation ▴ Policy Statement II. PS17/14.

- European Parliament and Council. (2014). Directive 2014/65/EU on markets in financial instruments (MiFID II).

- European Commission. (2017). Commission Delegated Regulation (EU) 2017/575 supplementing Directive 2014/65/EU on markets in financial instruments with regard to regulatory technical standards concerning the data investment firms must publish on the quality of execution of transactions.

- European Commission. (2017). Commission Delegated Regulation (EU) 2017/565 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.

- Lehalle, C. A. & Laruelle, S. (2013). Market Microstructure in Practice. World Scientific Publishing Company.

- O’Hara, M. (1995). Market Microstructure Theory. Blackwell Publishers.

- Harris, L. (2003). Trading and Exchanges ▴ Market Microstructure for Practitioners. Oxford University Press.

![Precision system for institutional digital asset derivatives. Translucent elements denote multi-leg spread structures and RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-infrastructure-for-institutional-digital-asset-derivatives-request-for-quote-protocol-optimization.jpg)

## Reflection

![Sleek metallic components with teal luminescence precisely intersect, symbolizing an institutional-grade Prime RFQ. This represents multi-leg spread execution for digital asset derivatives via RFQ protocols, ensuring high-fidelity execution, optimal price discovery, and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-best-execution-system.jpg)

## From Obligation to Operational Alpha

The intricate requirements of MiFID II concerning best execution for RFQ trades can be viewed through two distinct lenses. The first is that of a complex regulatory burden, a set of prescriptive rules requiring significant investment in technology and governance simply to remain compliant. This perspective, while understandable, is operationally limiting.

The second, more strategic viewpoint, frames the best execution framework as a powerful system for optimizing a core function of any investment firm ▴ the sourcing and execution of liquidity. It presents an opportunity to transform a compliance necessity into a source of demonstrable value for clients and a durable competitive advantage for the firm.

The process of building a robust, data-driven execution framework forces a firm to ask fundamental questions about its trading processes. Which counterparties truly provide the most competitive pricing? How can we measure and minimize the implicit costs of information leakage in an RFQ? What is the optimal number of dealers to query for a given instrument to maximize competition without signaling our intent too broadly?

Answering these questions with quantitative rigor, rather than trader intuition, elevates the firm’s operational intelligence. The systems built to satisfy MiFID II’s reporting requirements become the engine for a continuous process of discovery and optimization. The result is a system that not only proves compliance but actively seeks out and captures execution alpha ▴ the incremental performance gains derived from superior trading processes. This is the ultimate purpose of a well-architected execution system ▴ to translate regulatory mandates into measurable, repeatable performance.

![A robust green device features a central circular control, symbolizing precise RFQ protocol interaction. This enables high-fidelity execution for institutional digital asset derivatives, optimizing market microstructure, capital efficiency, and complex options trading within a Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-derivatives-rfq-protocol-interface-for-precise-market-microstructure-execution.jpg)

## Glossary

<a href="https://prime.greeks.live/area/financial-instruments/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting transparent planes and glowing cyan structures symbolize a sophisticated institutional RFQ protocol. This depicts high-fidelity execution, robust market microstructure, and optimal price discovery for digital asset derivatives, enhancing capital efficiency and minimizing slippage via aggregated inquiry](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-framework-for-optimal-market-microstructure-and-capital-efficiency.jpg)

## Financial Instruments

Meaning ▴ Financial instruments represent codified contractual agreements that establish specific claims, obligations, or rights concerning the transfer of economic value or risk between parties. </a><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">
![Precision-engineered abstract components depict institutional digital asset derivatives trading. A central sphere, symbolizing core asset price discovery, supports intersecting elements representing multi-leg spreads and aggregated inquiry](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-optimization.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/execution-factors/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A futuristic system component with a split design and intricate central element, embodying advanced RFQ protocols. This visualizes high-fidelity execution, precise price discovery, and granular market microstructure control for institutional digital asset derivatives, optimizing liquidity provision and minimizing slippage](https://options.greeks.live/wp-content/uploads/2025/07/advanced-rfq-protocols-for-digital-asset-derivatives-price-discovery.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/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Reflective and translucent discs overlap, symbolizing an RFQ protocol bridging market microstructure with institutional digital asset derivatives. This depicts seamless price discovery and high-fidelity execution, accessing latent liquidity for optimal atomic settlement within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-execution-best-price-discovery.jpg)

## Best Execution

Meaning ▴ Best Execution is the obligation to obtain the most favorable terms reasonably available for a client's order. </a><a href="https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished glass sphere reflecting diagonal beige, black, and cyan bands, rests on a metallic base against a dark background. This embodies RFQ-driven Price Discovery and High-Fidelity Execution for Digital Asset Derivatives, optimizing Market Microstructure and mitigating Counterparty Risk via Prime RFQ Private Quotation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-best-execution-protocol.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/professional-clients/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Professional Clients

Meaning ▴ Professional Clients represent sophisticated institutional entities, including but not limited to investment firms, hedge funds, asset managers, and corporate treasuries, which possess the requisite expertise, experience, and financial capacity to comprehend and assume the risks associated with complex digital asset derivatives. </a><a href="https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimizing-multi-leg-spreads-for-optimal-capital-efficiency.jpg)

## Rfq

Meaning ▴ Request for Quote (RFQ) is a structured communication protocol enabling a market participant to solicit executable price quotations for a specific instrument and quantity from a selected group of liquidity providers. </a><a href="https://prime.greeks.live/area/execution-strategy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, angular metallic system, an algorithmic trading engine, features a central intelligence layer. It embodies high-fidelity RFQ protocols, optimizing price discovery and best execution for institutional digital asset derivatives, managing counterparty risk and slippage](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-engine-for-best-execution.jpg)

## Execution Strategy

Meaning ▴ A defined algorithmic or systematic approach to fulfilling an order in a financial market, aiming to optimize specific objectives like minimizing market impact, achieving a target price, or reducing transaction costs. </a><a href="https://prime.greeks.live/area/best-execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Best Execution Framework

Meaning ▴ The Best Execution Framework defines a structured methodology for achieving the most advantageous outcome for client orders, considering price, cost, speed, likelihood of execution and settlement, order size, and any other relevant considerations. </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">
![Stacked modular components with a sharp fin embody Market Microstructure for Digital Asset Derivatives. This represents High-Fidelity Execution via RFQ protocols, enabling Price Discovery, optimizing Capital Efficiency, and managing Gamma Exposure within an Institutional Prime RFQ for Block Trades](https://options.greeks.live/wp-content/uploads/2025/07/modular-system-for-institutional-digital-asset-derivatives-rfq-protocol-optimization.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/execution-price/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Execution Price

Meaning ▴ The Execution Price represents the definitive, realized price at which a specific order or trade leg is completed within a financial market system. </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">
![Precision-engineered institutional-grade Prime RFQ modules connect via intricate hardware, embodying robust RFQ protocols for digital asset derivatives. This underlying market microstructure enables high-fidelity execution and atomic settlement, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-prime-os-modules-enabling-institutional-digital-asset-derivatives-rfq-protocols-for-best-execution.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/rfq-trades/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek, intersecting planes, one teal, converge at a reflective central module. This visualizes an institutional digital asset derivatives Prime RFQ, enabling RFQ price discovery across liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-engine-optimizing-institutional-liquidity-aggregation-and-best-execution.jpg)

## Rfq Trades

Meaning ▴ RFQ Trades, or Request for Quote Trades, represents a structured, bilateral or multilateral negotiation protocol employed by institutional participants to solicit price indications for specific financial instruments, typically off-exchange. </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">
![An abstract composition featuring two intersecting, elongated objects, beige and teal, against a dark backdrop with a subtle grey circular element. This visualizes RFQ Price Discovery and High-Fidelity Execution for Multi-Leg Spread Block Trades within a Prime Brokerage Crypto Derivatives OS for Institutional Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-options-rfq-for-multi-leg-spreads-price-discovery.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/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered RFQ protocol engine, its central teal sphere signifies high-fidelity execution for digital asset derivatives. This module embodies a Principal's dedicated liquidity pool, facilitating robust price discovery and atomic settlement within optimized market microstructure, ensuring best execution](https://options.greeks.live/wp-content/uploads/2025/08/institutional-rfq-engine-for-digital-asset-derivatives-best-execution.jpg)

## Liquidity Providers

Meaning ▴ Liquidity Providers are market participants, typically institutional entities or sophisticated trading firms, that facilitate efficient market operations by continuously quoting bid and offer prices for financial instruments. </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">
![Precision instrument featuring a sharp, translucent teal blade from a geared base on a textured platform. This symbolizes high-fidelity execution of institutional digital asset derivatives via RFQ protocols, optimizing market microstructure for capital efficiency and algorithmic trading on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-algorithmic-execution-infrastructure-for-institutional-digital-asset-derivatives-request-for-quote-protocols-optimal-liquidity.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/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark blue, precision-engineered blade-like instrument, representing a digital asset derivative or multi-leg spread, rests on a light foundational block, symbolizing a private quotation or block trade. This structure intersects robust teal market infrastructure rails, indicating RFQ protocol execution within a Prime RFQ for high-fidelity execution and liquidity aggregation in institutional trading](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-framework-multi-leg-spreads-best-execution-capital-efficiency.jpg)

## Management System

The OMS codifies investment strategy into compliant, executable orders; the EMS translates those orders into optimized market interaction. </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">
![Illuminated conduits passing through a central, teal-hued processing unit abstractly depict an Institutional-Grade RFQ Protocol. This signifies High-Fidelity Execution of Digital Asset Derivatives, enabling Optimal Price Discovery and Aggregated Liquidity for Multi-Leg Spreads](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-best-execution.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA) is the quantitative methodology for assessing the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, metallic mechanism symbolizes an advanced institutional trading system. The central sphere represents aggregated liquidity and precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-for-optimal-price-discovery-and-best-execution.jpg)

## Tca

Meaning ▴ Transaction Cost Analysis (TCA) represents a quantitative methodology designed to evaluate the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered metallic institutional trading platform, bisected by an execution pathway, features a central blue RFQ protocol engine. This Crypto Derivatives OS core facilitates high-fidelity execution, optimal price discovery, and multi-leg spread trading, reflecting advanced market microstructure](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-institutional-digital-asset-derivatives-execution-core-facilitating-rfq-protocol-driven-optimal-price-discovery-and-multi-leg-spread-trading-for-capital-efficiency.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/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A prominent domed optic with a teal-blue ring and gold bezel. This visual metaphor represents an institutional digital asset derivatives RFQ interface, providing high-fidelity execution for price discovery within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/precision-optic-interface-for-institutional-digital-asset-derivatives-rfq-protocol-execution-and-high-fidelity-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/regulatory-compliance/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two reflective, disc-like structures, one tilted, one flat, symbolize the Market Microstructure of Digital Asset Derivatives. This metaphor encapsulates RFQ Protocols and High-Fidelity Execution within a Liquidity Pool for Price Discovery, vital for a Principal's Operational Framework ensuring Atomic Settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-liquidity-aggregation-optimizing-market-microstructure-principal-trading-best-execution-atomic-settlement.jpg)

## Regulatory Compliance

Meaning ▴ Adherence to legal statutes, regulatory mandates, and internal policies governing financial operations, especially in institutional digital asset derivatives. </a>

**Tags:** [Best Execution Framework](https://options.greeks.live/area/best-execution-framework/), [Transaction Cost](https://options.greeks.live/area/transaction-cost/), [RFQ](https://options.greeks.live/area/rfq/), [Execution Framework](https://options.greeks.live/area/execution-framework/), [Transaction Cost Analysis](https://options.greeks.live/area/transaction-cost-analysis/), [Liquidity Sourcing](https://options.greeks.live/area/liquidity-sourcing/)	

## Discover More

- 
### [How Does MiFID II Influence RFQ Data Governance and Best Execution Requirements?](https://options.greeks.live/question/how-does-mifid-ii-influence-rfq-data-governance-and-best-execution-requirements/)
![A sleek, metallic mechanism symbolizes an advanced institutional trading system. The central sphere represents aggregated liquidity and precise price discovery. Its metallic arm signifies an algorithmic trading engine, facilitating high-fidelity execution for digital asset derivatives, with intricate base circuitry depicting optimized RFQ protocols and robust market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-for-optimal-price-discovery-and-best-execution.jpg)

MiFID II mandates that RFQ protocols evolve into fully auditable, data-driven systems to prove best execution for clients.

- 
### [How Does the Best Execution Obligation Differ for Retail versus Professional Clients under MiFID II?](https://options.greeks.live/question/how-does-the-best-execution-obligation-differ-for-retail-versus-professional-clients-under-mifid-ii/)
![Intersecting muted geometric planes, with a central glossy blue sphere. This abstract visualizes market microstructure for institutional digital asset derivatives. The sphere embodies a block trade or private quotation via RFQ protocols, ensuring high-fidelity execution and atomic settlement on a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-5.jpg)

MiFID II tailors the best execution obligation from a cost-centric duty for retail clients to a multi-factor strategic mandate for professionals.

- 
### [What Are the Key Differences in Applying Best Execution to a Professional Client versus a Retail Client for OTC Trades?](https://options.greeks.live/question/what-are-the-key-differences-in-applying-best-execution-to-a-professional-client-versus-a-retail-client-for-otc-trades/)
![An abstract composition featuring two intersecting, elongated objects, beige and teal, against a dark backdrop with a subtle grey circular element. This visualizes RFQ Price Discovery and High-Fidelity Execution for Multi-Leg Spread Block Trades within a Prime Brokerage Crypto Derivatives OS for Institutional Digital Asset Derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-options-rfq-for-multi-leg-spreads-price-discovery.jpg)

Best execution for OTC trades shifts from a protective duty of ensuring fair cost for retail clients to enabling strategic, multi-factor performance for professionals.

- 
### [How Does Deferred Reporting Impact a Firm’s Best Execution Obligations under MiFID II?](https://options.greeks.live/question/how-does-deferred-reporting-impact-a-firms-best-execution-obligations-under-mifid-ii/)
![A modular system with beige and mint green components connected by a central blue cross-shaped element, illustrating an institutional-grade RFQ execution engine. This sophisticated architecture facilitates high-fidelity execution, enabling efficient price discovery for multi-leg spreads and optimizing capital efficiency within a Prime RFQ framework for digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/principal-prime-os-rfq-engine-for-digital-asset-derivatives.jpg)

Deferred reporting impacts best execution by shifting the burden of proof from public post-trade data to a firm's internal, auditable, pre-trade analysis.

- 
### [What Are the Primary Best Execution Factors under the MiFID II Framework?](https://options.greeks.live/question/what-are-the-primary-best-execution-factors-under-the-mifid-ii-framework/)
![A sharp, dark, precision-engineered element, indicative of a targeted RFQ protocol for institutional digital asset derivatives, traverses a secure liquidity aggregation conduit. This interaction occurs within a robust market microstructure platform, symbolizing high-fidelity execution and atomic settlement under a Principal's operational framework for best execution.](https://options.greeks.live/wp-content/uploads/2025/07/principal-grade-digital-asset-derivatives-rfq-protocol-execution-engine.jpg)

MiFID II best execution demands a systematic, data-driven framework to demonstrably secure the best possible client outcome.

- 
### [How Do Firms Quantitatively Measure and Prove Best Execution to Regulators?](https://options.greeks.live/question/how-do-firms-quantitatively-measure-and-prove-best-execution-to-regulators/)
![A transparent teal prism on a white base supports a metallic pointer. This signifies an Intelligence Layer on Prime RFQ, enabling high-fidelity execution and algorithmic trading. It optimizes market microstructure for precise price discovery and capital efficiency via RFQ protocols.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-derivatives-rfq-execution-prime-microstructure-liquidity.jpg)

Firms prove best execution by systematically documenting a data-driven process that optimizes for price, cost, and speed using Transaction Cost Analysis.

- 
### [How Does MiFID II Define the “All Sufficient Steps” Requirement for Best Execution?](https://options.greeks.live/question/how-does-mifid-ii-define-the-all-sufficient-steps-requirement-for-best-execution/)
![A multi-layered electronic system, centered on a precise circular module, visually embodies an institutional-grade Crypto Derivatives OS. It represents the intricate market microstructure enabling high-fidelity execution via RFQ protocols for digital asset derivatives, driven by an intelligence layer facilitating algorithmic trading and optimal price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-optimal-price-discovery.jpg)

MiFID II's "all sufficient steps" requirement mandates a provable, data-driven process to ensure best client outcomes.

- 
### [How Do Regulatory Frameworks like Mifid Ii Specifically Define Best Execution for Otc Derivatives Traded via Rfq?](https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-specifically-define-best-execution-for-otc-derivatives-traded-via-rfq/)
![A precision instrument probes a speckled surface, visualizing market microstructure and liquidity pool dynamics within a dark pool. This depicts RFQ protocol execution, emphasizing price discovery for digital asset derivatives. Elements represent volatility surface data and algorithmic trading probes ensuring capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-flow.jpg)

MiFID II defines best execution for OTC derivatives via RFQ as a documented, multi-factor process ensuring the best possible client outcome.

- 
### [How Has MiFID II Specifically Altered Best Execution Requirements for Fixed Income RFQs?](https://options.greeks.live/question/how-has-mifid-ii-specifically-altered-best-execution-requirements-for-fixed-income-rfqs/)
![An intricate, transparent cylindrical system depicts a sophisticated RFQ protocol for digital asset derivatives. Internal glowing elements signify high-fidelity execution and algorithmic trading. A central angular structure represents atomic settlement and multi-leg spread capabilities, ensuring best execution within institutional trading.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-architecture.jpg)

MiFID II transformed fixed income RFQ best execution from a qualitative duty into a quantitatively provable, data-driven process.

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---

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