# How Does MiFID II Specifically Regulate RFQ for Non-Equity Instruments? ▴ Question

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

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![A beige probe precisely connects to a dark blue metallic port, symbolizing high-fidelity execution of Digital Asset Derivatives via an RFQ protocol. Alphanumeric markings denote specific multi-leg spread parameters, highlighting granular market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-execution-hub.jpg)

![Two abstract, segmented forms intersect, representing dynamic RFQ protocol interactions and price discovery mechanisms. The layered structures symbolize liquidity aggregation across multi-leg spreads within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-microstructure.jpg)

## Concept

The Markets in Financial Instruments Directive II ([MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)) fundamentally re-architected the European trading landscape, extending its regulatory perimeter deep into the operational mechanics of non-equity markets. For participants accustomed to the bilateral and often opaque nature of [Request for Quote](https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (RFQ) protocols in asset classes like bonds and derivatives, the directive introduced a new systemic logic. The core objective was to inject a calibrated level of transparency into these markets, moving them from private arrangements toward a more centralized and observable structure. This was a direct response to the lessons of the 2008 financial crisis, where the systemic risk embedded in dark, over-the-counter (OTC) derivatives markets became starkly apparent.

The regulation operates from a foundational premise ▴ that price discovery is a public good, and its efficiency is paramount to market integrity and investor protection. MiFID II confronts the inherent tension within the [RFQ](https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) model. On one hand, the protocol is essential for executing large or illiquid trades, where exposing an order to a central limit order book (CLOB) would result in significant market impact and price slippage.

It allows a client to discreetly solicit quotes from a select group of liquidity providers. On the other hand, this discretion creates information asymmetry and fragments liquidity, making it difficult for the broader market to ascertain a true and fair price for an instrument at any given moment.

> MiFID II imposes a structured transparency framework on non-equity RFQ systems, recalibrating the balance between discreet liquidity sourcing and public price discovery.

![A dual-toned cylindrical component features a central transparent aperture revealing intricate metallic wiring. This signifies a core RFQ processing unit for Digital Asset Derivatives, enabling rapid Price Discovery and High-Fidelity Execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-core-best-execution-prime-os.jpg)

## What Is the Core Regulatory Challenge for RFQ Systems?

The central challenge MiFID II addresses is how to apply transparency obligations to trading systems that are, by design, not fully transparent. Unlike a CLOB where all bids and offers are displayed, an RFQ system involves a request sent to a limited number of participants. The regulation resolves this by creating a sophisticated, tiered system of obligations that depend on the type of [trading venue](https://prime.greeks.live/area/trading-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the liquidity of the instrument, and the size of the trade. It effectively creates a spectrum of transparency, from full pre-trade publication to various forms of waivers and deferrals.

This system forces a new calculus upon all market participants. Trading venues, including Multilateral Trading Facilities (MTFs) and Organised Trading Facilities (OTFs), must now integrate pre-trade quote transparency rules into their RFQ workflows. Investment firms that deal on their own account on a frequent and substantial basis are reclassified as Systematic Internalisers (SIs), subjecting them to specific, stringent quoting obligations when they receive an RFQ. The regulation effectively mandates that even in a bilateral quoting context, the process must contribute, where appropriate, to the public pool of pricing data.

![A precision-engineered teal metallic mechanism, featuring springs and rods, connects to a light U-shaped interface. This represents a core RFQ protocol component enabling automated price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/rfq-execution-engine-component-for-institutional-digital-asset-derivatives.jpg)

![Polished opaque and translucent spheres intersect sharp metallic structures. This abstract composition represents advanced RFQ protocols for institutional digital asset derivatives, illustrating multi-leg spread execution, latent liquidity aggregation, and high-fidelity execution within principal-driven trading environments](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-optimal-execution-orchestration.jpg)

## Strategy

Navigating MiFID II’s RFQ regulations requires a strategic framework that aligns a firm’s execution policy with the directive’s complex transparency architecture. The strategy hinges on understanding the three core pillars of the regulation as they apply to non-equity instruments ▴ [pre-trade transparency](https://prime.greeks.live/area/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), [post-trade transparency](https://prime.greeks.live/area/post-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and best execution. Each pillar presents distinct operational requirements and strategic choices for investment firms, trading venues, and systematic internalisers.

The directive’s approach is one of calibrated transparency. It recognizes that a one-size-fits-all model would destroy liquidity in many non-equity markets, which are inherently less standardized and more fragmented than equity markets. Therefore, the strategic imperative is to master the system of waivers and deferrals, which act as the system’s pressure-release valves. These mechanisms allow firms to continue using RFQ for sensitive orders while still adhering to the overarching goals of the regulation.

![A luminous blue Bitcoin coin rests precisely within a sleek, multi-layered platform. This embodies high-fidelity execution of digital asset derivatives via an RFQ protocol, highlighting price discovery and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-3.jpg)

## Pre-Trade Transparency and Its Waivers

Pre-trade transparency mandates that trading venues and SIs make bid and offer prices public on a continuous basis during trading hours. For an RFQ system, this creates a potential paradox. The solution lies in a set of waivers that can be granted by national competent authorities. Strategically, a firm’s choice of execution venue and its order handling logic must be designed to leverage these waivers where permissible.

- **Liquid Market Waiver** ▴ This is the foundational waiver. For instruments deemed illiquid by the European Securities and Markets Authority (ESMA), pre-trade transparency obligations are waived entirely. A firm’s internal systems must be able to dynamically track the liquidity status of thousands of instruments.

- **Size Specific to Instrument (SSTI) Waiver** ▴ For liquid instruments, pre-trade transparency can be waived for orders that are large in scale compared to the normal market size. This is a critical waiver for block trading via RFQ. Execution strategies must be calibrated to place orders that meet the SSTI thresholds, which vary significantly by instrument sub-class.

- **Negotiated Trade Waiver** ▴ This allows for the non-display of pre-trade information for transactions that are formalised on a trading venue but negotiated privately. This is highly relevant for voice-brokered or chat-based RFQ workflows that are ultimately booked on an OTF. 

> The strategic deployment of waivers is the primary mechanism for mitigating information leakage and market impact within MiFID II’s RFQ framework.

![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](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-flow.jpg)

## Post-Trade Transparency and Deferrals

While pre-trade transparency can often be waived, post-trade transparency is mandatory. All trades must be reported publicly, including price and volume, as close to real-time as possible. The strategic element here involves the use of publication deferrals. Similar to pre-trade waivers, competent authorities can authorize delayed publication for large trades or trades in illiquid instruments.

This gives liquidity providers time to hedge and offload the risk of a large position without the entire market immediately trading against them. An effective execution strategy involves not only securing a good price but also negotiating the longest possible deferral period allowed under the rules.

The table below outlines the strategic considerations for different market participants when engaging in RFQ protocols under MiFID II.

### Strategic Considerations for MiFID II RFQ Compliance

| Participant Type | Primary Strategic Goal | Key Regulatory Lever | Operational Imperative |
| --- | --- | --- | --- |
| Buy-Side Firm | Achieve Best Execution while minimizing information leakage and market impact. | Leverage of SSTI and illiquid market waivers through careful order sizing and venue selection. | Develop a sophisticated order routing system that can identify the optimal compliant venue and RFQ protocol for a given instrument and size. |
| Trading Venue (MTF/OTF) | Provide compliant and efficient RFQ functionality to attract order flow. | Obtain and correctly implement pre-trade transparency waivers (SSTI, illiquid) from the national competent authority. | Build robust system logic to manage RFQ workflows, apply waivers correctly, and fulfill post-trade reporting duties. |
| Systematic Internaliser (SI) | Meet mandatory quoting obligations while managing proprietary risk. | Utilize the ability to update or withdraw quotes under exceptional market conditions and define access based on commercial policy. | Establish a resilient infrastructure for responding to a high volume of RFQs with firm, executable quotes and managing the resulting inventory risk. |

![Dark, pointed instruments intersect, bisected by a luminous stream, against angular planes. This embodies institutional RFQ protocol driving cross-asset execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-best-execution-system-architecture.jpg)

![A translucent, faceted sphere, representing a digital asset derivative block trade, traverses a precision-engineered track. This signifies high-fidelity execution via an RFQ protocol, optimizing liquidity aggregation, price discovery, and capital efficiency within institutional market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-block-trade-high-fidelity-execution-protocol-prime-os-path.jpg)

## Execution

The execution of a non-equity RFQ under MiFID II is a precise, multi-stage process governed by a detailed rule set. It transforms the traditionally informal protocol into a structured, auditable workflow. For an investment firm, successfully executing a large bond or derivative trade requires a deep, operational understanding of instrument classification, venue protocols, and reporting mechanics. The entire lifecycle of the trade, from the initial quote request to the final public report, is subject to regulatory scrutiny.

![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)

## The Operational Playbook for a Compliant RFQ

Executing a trade via RFQ involves a sequence of checks and decisions that must be systematically recorded. This playbook outlines the critical steps for a buy-side firm looking to execute a non-equity trade.

- **Instrument Classification** ▴ The first step is to determine the regulatory status of the instrument. The firm’s systems must query ESMA’s Financial Instruments Transparency System (FITRS) database to ascertain two key facts ▴ Is the instrument “Traded on a Trading Venue” (TOTV)? And is it classified as liquid or illiquid for the current period? This determination dictates the entire transparency regime that applies.

- **Pre-Trade Compliance Check** ▴ Based on the instrument’s status, the firm must decide on its execution strategy.

<li>If the instrument is **illiquid**, pre-trade transparency obligations are waived. The firm can proceed with an RFQ to multiple dealers on its chosen venue (MTF or OTF) or directly with an SI.

- If the instrument is **liquid**, the firm must check if the order size qualifies for the Size Specific to Instrument (SSTI) waiver. If the order is above the SSTI threshold, pre-trade transparency is waived. If it is below the threshold, the firm must use a venue and protocol that complies with pre-trade transparency, which may involve the venue displaying aggregated or indicative quotes.

</li>
- **Venue and Counterparty Selection** ▴ The firm sends the RFQ to a chosen set of counterparties. If dealing with a [Systematic Internaliser](https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the SI is obligated to provide a firm, executable quote for liquid instruments up to a certain size. The SI can decline to quote for sizes above its threshold or if it falls outside its commercial policy. On a venue like an MTF or OTF, the RFQ is governed by the venue’s rulebook, which itself must be MiFID II compliant.

- **Trade Execution and [Best Execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Record** ▴ The firm executes against the chosen quote. Crucially, it must record the reasons for its decision as part of its best execution obligations. This involves documenting not just the price but also factors like speed, likelihood of execution, and counterparty credit risk.

- **Post-Trade Reporting** ▴ The responsibility for public trade reporting falls to the executing party. If the trade is executed on a trading venue, the venue is responsible for the report. If the trade is executed OTC with an SI (or another dealer), the seller is generally responsible for reporting the trade via an [Approved Publication Arrangement](https://prime.greeks.live/area/approved-publication-arrangement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (APA). The firm must ensure the report is made “as close to real-time as technically possible.”

- **Application of Deferrals** ▴ For large trades (above the [LIS threshold](https://prime.greeks.live/area/lis-threshold/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)), the reporting party can apply a publication deferral. The length of the deferral depends on the instrument type and the size of the trade. The table below provides an illustrative example of the post-trade deferral regime for bonds, which is a core component of the execution process for large orders.

![A gleaming, translucent sphere with intricate internal mechanisms, flanked by precision metallic probes, symbolizes a sophisticated Principal's RFQ engine. This represents the atomic settlement of multi-leg spread strategies, enabling high-fidelity execution and robust price discovery within institutional digital asset derivatives markets, minimizing latency and slippage for optimal alpha generation and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/inst-digital-asset-deriv-rfq-os-for-optimal-high-fidelity-trade-exec.jpg)

## How Are Post Trade Deferrals Executed?

The post-trade deferral mechanism is a critical tool for risk management in the execution of large non-equity trades. The ability to delay the public dissemination of [trade details](https://prime.greeks.live/question/how-can-post-trade-data-be-used-to-improve-pre-trade-cost-estimations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) allows liquidity providers to hedge their positions without signaling their activity to the broader market. The logic for these deferrals is highly granular, with different timeframes applied based on the instrument’s liquidity and the trade’s size relative to pre-defined thresholds.

### Illustrative Post-Trade Publication Deferral Periods for Bonds

| Instrument Type | Trade Size Percentile | Liquidity Status | Standard Deferral | Extended Deferral Option |
| --- | --- | --- | --- | --- |
| Sovereign Bond | Above LIS Threshold (e.g. > €15m) | Liquid | Two trading days | Publication of volume-masked trade details after 15 minutes, full details after two days. |
| Corporate Bond | Above LIS Threshold (e.g. > €5m) | Liquid | Two trading days | Publication of volume-masked trade details after 15 minutes, full details after two days. |
| Corporate Bond | Any size | Illiquid | Two trading days | Option to delay further, up to four weeks, subject to competent authority approval for very large or sensitive trades. |
| Covered Bond | Above LIS Threshold (e.g. > €10m) | Liquid | Two trading days | Publication of volume-masked trade details after 15 minutes, full details after two days. |

This complex architecture means that execution is a systems-level challenge. It requires integrated technology that can manage instrument data, venue connectivity, compliance checks, and reporting workflows in a seamless and automated fashion. The era of informal, purely relationship-based RFQ trading in European non-equity markets has been definitively replaced by a system of structured, transparent, and data-driven execution.

![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)

## References

- Financial Conduct Authority. “Non-Equity Transparency Proposals.” Ashurst, 8 Jan. 2024.

- Comisión Nacional del Mercado de Valores. “Pre- and post-trading transparency.” CNMV.

- Callaghan, Elizabeth. “MiFID II/MiFIR ▴ Transparency & Best Execution requirements in respect of bonds.” International Capital Market Association, Q1 2016.

- International Swaps and Derivatives Association. “ISDA Commentary on Pre-Trade Transparency in MIFIR (Huebner report).” ISDA, 16 Sep. 2022.

- Autorité des Marchés Financiers. “Implementing MiFID 2 pre- and post-trade transparency requirements in France.” AMF.

- European Securities and Markets Authority. “MiFIR transaction reporting.” ESMA.

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

- Lehalle, Charles-Albert, and Sophie Laruelle. Market Microstructure in Practice. World Scientific Publishing, 2013.

![A sleek Prime RFQ interface features a luminous teal display, signifying real-time RFQ Protocol data and dynamic Price Discovery within Market Microstructure. A detached sphere represents an optimized Block Trade, illustrating High-Fidelity Execution and Liquidity Aggregation for Institutional Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/08/advanced-rfq-protocol-engine-for-institutional-digital-asset-derivatives.jpg)

## Reflection

The intricate regulatory framework of MiFID II forces a re-evaluation of a firm’s entire trading architecture. The directive transforms the RFQ protocol from a simple communication tool into a component within a larger, interconnected system of transparency and data reporting. This compels market participants to look beyond the immediate goal of executing a single trade and consider the systemic footprint of their activity. How does your firm’s execution protocol currently balance the need for discreet liquidity access with the obligations of market transparency?

The regulations provide the rules, but the competitive edge is found in building a superior operational system that navigates these rules with maximum efficiency and strategic foresight. The data generated by these regulated processes is a strategic asset, offering insights into market structure and liquidity for those with the systems to analyze it.

![A teal and white sphere precariously balanced on a light grey bar, itself resting on an angular base, depicts market microstructure at a critical price discovery point. This visualizes high-fidelity execution of digital asset derivatives via RFQ protocols, emphasizing capital efficiency and risk aggregation within a Principal trading desk's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/precision-institutional-digital-asset-derivatives-rfq-execution-strategy.jpg)

## Glossary

<a href="https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A Prime RFQ interface for institutional digital asset derivatives displays a block trade module and RFQ protocol channels. Its low-latency infrastructure ensures high-fidelity execution within market microstructure, enabling price discovery and capital efficiency for Bitcoin options](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-rfq-protocol-engine-high-fidelity-execution-digital-asset-derivatives.jpg)

## Request for Quote

Meaning ▴ A Request for Quote, or RFQ, constitutes a formal communication initiated by a potential buyer or seller to solicit price quotations for a specified financial instrument or block of instruments from one or more liquidity providers. </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 sophisticated apparatus, potentially a price discovery or volatility surface calibration tool. A blue needle with sphere and clamp symbolizes high-fidelity execution pathways and RFQ protocol integration within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-institutional-digital-asset-derivatives-execution.jpg)

## Mifid Ii

Meaning ▴ MiFID II, the Markets in Financial Instruments Directive II, constitutes a comprehensive regulatory framework enacted by the European Union to govern financial markets, investment firms, and trading venues. </a><a href="https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, conical precision instrument, with a vibrant mint-green tip and a robust grey base, represents the cutting-edge of institutional digital asset derivatives trading. Its sharp point signifies price discovery and best execution within complex market microstructure, powered by RFQ protocols for dark liquidity access and capital efficiency in atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-microstructure-price-discovery-optimization-prime-os-intelligence-layer.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/trading-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Polished metallic surface with a central intricate mechanism, representing a high-fidelity market microstructure engine. Two sleek probes symbolize bilateral RFQ protocols for precise price discovery and atomic settlement of institutional digital asset derivatives on a Prime RFQ, ensuring best execution for Bitcoin Options](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-engine-core-market-microstructure-intelligence-layer.jpg)

## Trading Venue

Meaning ▴ A trading venue functions as a formalized electronic or physical system engineered to facilitate buyer-seller interaction for financial instrument exchange, establishing a mechanism for price discovery and order execution under defined operational rules. </a><a href="https://prime.greeks.live/area/post-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek, angled structures intersect, reflecting a central convergence. Intersecting light planes illustrate RFQ Protocol pathways for Price Discovery and High-Fidelity Execution in Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-price-discovery-microstructure.jpg)

## Post-Trade Transparency

Meaning ▴ Post-Trade Transparency defines the public disclosure of executed transaction details, encompassing price, volume, and timestamp, after a trade has been completed. </a><a href="https://prime.greeks.live/area/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated internal mechanism of a split sphere reveals the core of an institutional-grade RFQ protocol. Polished surfaces reflect intricate components, symbolizing high-fidelity execution and price discovery within digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system.jpg)

## Pre-Trade Transparency

Meaning ▴ Pre-Trade Transparency refers to the real-time dissemination of bid and offer prices, along with associated sizes, prior to the execution of a trade. </a><a href="https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered beige and teal conduits intersect against a dark void, symbolizing a Prime RFQ protocol interface. Transparent structural elements suggest multi-leg spread connectivity and high-fidelity execution pathways for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/insti-grade-digital-asset-derivatives-rfq-protocols-multi-leg-execution-junction.jpg)

## Systematic Internaliser

Meaning ▴ A Systematic Internaliser (SI) is a financial institution executing client orders against its own capital on an organized, frequent, systematic basis off-exchange. </a><a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An intricate, transparent cylindrical system depicts a sophisticated RFQ protocol for digital asset derivatives. Internal glowing elements signify high-fidelity execution and algorithmic trading](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-architecture.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/approved-publication-arrangement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision instrument with multi-layered dial, symbolizing price discovery and volatility surface calibration. Its metallic arm signifies an algorithmic trading engine, enabling high-fidelity execution for RFQ block trades, minimizing slippage within an institutional Prime RFQ for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-trading-platform-calibrating-rfq-protocols-for-high-fidelity-execution-and-market-microstructure-optimization.jpg)

## Approved Publication Arrangement

Meaning ▴ An Approved Publication Arrangement (APA) is a regulated entity authorized to publicly disseminate post-trade transparency data for financial instruments, as mandated by regulations such as MiFID II and MiFIR. </a><a href="https://prime.greeks.live/area/lis-threshold/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interconnected teal and beige geometric facets form an abstract construct, embodying a sophisticated RFQ protocol for institutional digital asset derivatives. This visualizes multi-leg spread structuring, liquidity aggregation, high-fidelity execution, principal risk management, capital efficiency, and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-multi-leg-spread-execution-and-optimal-liquidity-aggregation.jpg)

## Lis Threshold

Meaning ▴ The LIS Threshold represents a dynamically determined order size benchmark, classifying trades as "Large In Scale" to delineate distinct market microstructure rules, primarily concerning pre-trade transparency obligations and enabling different execution methodologies for institutional digital asset derivatives. </a><a href="https://prime.greeks.live/question/how-can-post-trade-data-be-used-to-improve-pre-trade-cost-estimations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered multi-layered architecture depicts institutional digital asset derivatives platforms, showcasing modularity for optimal liquidity aggregation and atomic settlement. This visualizes sophisticated RFQ protocols, enabling high-fidelity execution and robust pre-trade analytics](https://options.greeks.live/wp-content/uploads/2025/08/modular-digital-asset-derivative-prime-os-for-institutional-rfq-and-block-trade-execution.jpg)

## Trade Details

Post-trade data provides the empirical ground truth needed to calibrate predictive pre-trade cost models for superior execution strategy. </a>

**Tags:** [Best Execution](https://options.greeks.live/area/best-execution/), [MiFID II](https://options.greeks.live/area/mifid-ii/), [Organised Trading Facility](https://options.greeks.live/area/organised-trading-facility/), [Market Microstructure](https://options.greeks.live/area/market-microstructure/), [Request for Quote](https://options.greeks.live/area/request-for-quote/), [Post-Trade Transparency](https://options.greeks.live/area/post-trade-transparency/)	

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- 
### [How Has MiFID II’s Transparency Mandate Affected Liquidity in Corporate Bond Markets?](https://options.greeks.live/question/how-has-mifid-iis-transparency-mandate-affected-liquidity-in-corporate-bond-markets/)
![Abstract spheres and a translucent flow visualize institutional digital asset derivatives market microstructure. It depicts robust RFQ protocol execution, high-fidelity data flow, and seamless liquidity aggregation. This imagery underscores capital efficiency and atomic settlement within a Prime RFQ framework.](https://options.greeks.live/wp-content/uploads/2025/07/precision-market-microstructure-for-institutional-digital-asset-derivatives-leveraging-rfq-protocols-and-atomic-settlement-across-prime-os.jpg)

MiFID II re-architected the bond market's information flow, creating a complex, fragmented liquidity landscape.

- 
### [How Do Regulatory Frameworks like MiFID II Influence the Use of RFQs for Block Trading Transparency?](https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-influence-the-use-of-rfqs-for-block-trading-transparency/)
![An intricate mechanical assembly reveals the market microstructure of an institutional-grade RFQ protocol engine. It visualizes high-fidelity execution for digital asset derivatives block trades, managing counterparty risk and multi-leg spread strategies within a liquidity pool, embodying a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-architecture.jpg)

MiFID II formalized the RFQ protocol within regulated frameworks, making it a vital tool for managing block trading under new transparency rules.

- 
### [What Are the Regulatory Considerations When Choosing between RFQ and CLOB for Derivatives?](https://options.greeks.live/question/what-are-the-regulatory-considerations-when-choosing-between-rfq-and-clob-for-derivatives/)
![Robust polygonal structures depict foundational institutional liquidity pools and market microstructure. Transparent, intersecting planes symbolize high-fidelity execution pathways for multi-leg spread strategies and atomic settlement, facilitating private quotation via RFQ protocols within a controlled dark pool environment, ensuring optimal price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-prime-os.jpg)

Regulatory frameworks dictate the strategic use of RFQ for discreet, large-scale risk transfer and CLOB for transparent, liquid price discovery.

- 
### [How Did Mifid Ii Specifically Impact Bond Market Transparency?](https://options.greeks.live/question/how-did-mifid-ii-specifically-impact-bond-market-transparency/)
![A central core, symbolizing a Crypto Derivatives OS and Liquidity Pool, is intersected by two abstract elements. These represent Multi-Leg Spread and Cross-Asset Derivatives executed via RFQ Protocol. This visual embodies High-Fidelity Execution within an Institutional Trading framework, emphasizing Market Microstructure and Capital Efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-multi-leg-spread-execution.jpg)

MiFID II re-architected the bond market by imposing a public data layer, transforming execution strategy from a relationship basis to a quantitative discipline.

- 
### [How Does MiFID II Define a Systematic Internaliser for RFQ Trading?](https://options.greeks.live/question/how-does-mifid-ii-define-a-systematic-internaliser-for-rfq-trading/)
![A metallic precision tool rests on a circuit board, its glowing traces depicting market microstructure and algorithmic trading. A reflective disc, symbolizing a liquidity pool, mirrors the tool, highlighting high-fidelity execution and price discovery for institutional digital asset derivatives via RFQ protocols and Principal's Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocols-driving-high-fidelity-execution-and-market-microstructure-optimization-via-principal-prime-os.jpg)

A Systematic Internaliser is a firm whose principal trading volume requires it to follow venue-like transparency rules for client orders.

- 
### [How Does MiFID II Define the Venue of Execution for an RFQ Trade?](https://options.greeks.live/question/how-does-mifid-ii-define-the-venue-of-execution-for-an-rfq-trade/)
![A robust metallic framework supports a teal half-sphere, symbolizing an institutional grade digital asset derivative or block trade processed within a Prime RFQ environment. This abstract view highlights the intricate market microstructure and high-fidelity execution of an RFQ protocol, ensuring capital efficiency and minimizing slippage through precise system interaction.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-protocol-execution-engine.jpg)

MiFID II defines an RFQ execution venue as the multilateral system, typically an OTF, that facilitates the quote and trade interaction.

- 
### [What Are the Primary Differences between an Si and an Organized Trading Facility?](https://options.greeks.live/question/what-are-the-primary-differences-between-an-si-and-an-organized-trading-facility/)
![A modular, dark-toned system with light structural components and a bright turquoise indicator, representing a sophisticated Crypto Derivatives OS for institutional-grade RFQ protocols. It signifies private quotation channels for block trades, enabling high-fidelity execution and price discovery through aggregated inquiry, minimizing slippage and information leakage within dark liquidity pools.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-for-optimal-execution-1.jpg)

An SI is a bilateral principal trading system, while an OTF is a discretionary multilateral venue for non-equity instruments.

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---

**Original URL:** https://options.greeks.live/question/how-does-mifid-ii-specifically-regulate-rfq-for-non-equity-instruments/
