# How Does the MiFIR Review Impact Best Execution Obligations for Derivatives? ▴ Question

**Published:** 2025-08-01
**Categories:** Question

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![Abstract geometric structure with sharp angles and translucent planes, symbolizing institutional digital asset derivatives market microstructure. The central point signifies a core RFQ protocol engine, enabling precise price discovery and liquidity aggregation for multi-leg options strategies, crucial for high-fidelity execution and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principals-operational-framework-optimizing-institutional-digital-asset-derivatives-rfq-protocol-execution-for-alpha-generation.jpg)

![A sophisticated RFQ engine module, its spherical lens observing market microstructure and reflecting implied volatility. This Prime RFQ component ensures high-fidelity execution for institutional digital asset derivatives, enabling private quotation for block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-for-best-execution-protocol.jpg)

## Concept

The [MiFIR Review](https://prime.greeks.live/area/mifir-review/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) does not represent a loosening of [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) standards for derivatives. It signals a fundamental architectural shift. The previous regime, anchored by the administrative mandates of RTS 27 and RTS 28 reporting, induced a compliance posture focused on periodic, static data dumps. These reports were exercises in historical documentation, often failing to provide actionable intelligence for either clients or the firms themselves.

The system was designed to prove that a report had been filed, which is a very different objective from proving that optimal execution was achieved. The review surgically removes this reporting apparatus, a move that is being misinterpreted in some quarters as deregulation. This view is critically flawed.

The removal of these obligations creates a vacuum that is immediately filled by a far more demanding and dynamic set of requirements. The core best execution duty, the mandate to take all sufficient steps to obtain the best possible result for a client, is not only retained but reinforced. The review replaces a system of structured, but largely ineffective, reporting with a system predicated on continuous, evidence-based demonstration.

The introduction of a dedicated transparency regime for derivatives, including for the first time a substantive framework for Over-the-Counter (OTC) products, is the central pillar of this new architecture. It moves the measurement of [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) from a retrospective, report-based task to a real-time, data-centric one.

> The regulatory focus shifts from the act of reporting to the act of proving execution quality with verifiable market data.

This pivot has profound implications. For derivatives, an asset class defined by its complexity and heterogeneity, this change is particularly acute. The old framework struggled with the nuances of derivatives, where the concept of a single “best price” is often an oversimplification. The new regime, by mandating greater pre-trade and [post-trade transparency](https://prime.greeks.live/area/post-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) based on the instrument’s characteristics, provides the raw material ▴ the data ▴ needed for a more sophisticated analysis.

Firms are now tasked with building an internal system of proof. The obligation is to construct and maintain a coherent, demonstrable, and data-driven argument for why their execution methodology is optimal for a given client order in a specific derivative instrument. The regulatory burden has not been lifted; it has been transformed from a clerical task into a strategic, analytical, and technological challenge.

![A precision mechanism, symbolizing an algorithmic trading engine, centrally mounted on a market microstructure surface. Lens-like features represent liquidity pools and an intelligence layer for pre-trade analytics, enabling high-fidelity execution of institutional grade digital asset derivatives via RFQ protocols within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-microstructure.jpg)

## The New Architecture of Proof

The essence of the MiFIR Review’s impact on best execution is the transition from a ‘trust-me’ framework backed by periodic reports to a ‘show-me’ framework backed by granular [market data](https://prime.greeks.live/area/market-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The core legal obligation under MiFID II was always to achieve the best possible result, considering a range of execution factors including price, cost, speed, and likelihood of execution. The [RTS 27](https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and RTS 28 reports were intended to be the mechanism for demonstrating compliance.

Their failure to do so effectively, as acknowledged by regulators, prompted their removal. The new architecture is built on three foundational elements that collectively create a more demanding environment.

![The image depicts two distinct liquidity pools or market segments, intersected by algorithmic trading pathways. A central dark sphere represents price discovery and implied volatility within the market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-multi-leg-spread-execution-microstructure.jpg)

## A Dedicated Derivatives Transparency Regime

The first element is the creation of a standalone transparency framework for derivatives. This is a direct response to the failings of the “traded-on-a-trading-venue” (TOTV) concept, which proved ambiguous and led to inconsistent transparency application. The new rules apply pre- and post-trade transparency obligations based on the inherent characteristics of the derivative itself. This means that a wider range of standardized and centrally cleared derivatives will now have public data signatures, both before and after a trade is executed.

This provides a crucial public benchmark against which private executions can be measured. For firms, this means their execution quality is no longer judged in a vacuum but against a backdrop of observable market data.

![Abstract layers visualize institutional digital asset derivatives market microstructure. Teal dome signifies optimal price discovery, high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/08/high-fidelity-digital-asset-derivatives-rfq-execution-protocol-layers-and-market-microstructure-optimization.jpg)

## Inclusion of Over-the-Counter Instruments

The second element is the explicit inclusion of OTC derivatives within the scope of post-trade transparency. This is a significant expansion. The OTC market, by its nature, is more opaque than exchange-traded markets. By requiring post-trade disclosure for a larger set of these instruments, the review brings light to previously dark corners of the derivatives landscape.

This creates a more comprehensive data set for [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA), allowing firms and their clients to better evaluate the quality of execution for bilaterally negotiated trades. The challenge for firms is to capture, process, and integrate this new stream of OTC data into their best execution monitoring systems.

![Angular translucent teal structures intersect on a smooth base, reflecting light against a deep blue sphere. This embodies RFQ Protocol architecture, symbolizing High-Fidelity Execution for Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/dynamic-rfq-protocol-architecture-optimizing-digital-asset-derivative-liquidity-aggregation.jpg)

## The Rise of the Consolidated Tape

The third, and perhaps most critical, element is the anticipated role of the [Consolidated Tape](https://prime.greeks.live/area/consolidated-tape/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (CT). While the CT is being implemented, the regulatory expectation is clear ▴ its data will become a primary tool for validating best execution. The CT will aggregate [post-trade data](https://prime.greeks.live/area/post-trade-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) from across the fragmented landscape of European trading venues and approved publication arrangements (APAs). This will create a single, unified source of transaction data.

For derivatives, this means firms will have access to a far richer and more reliable data set to benchmark their own execution prices against. The existence of the CT shifts the burden of proof squarely onto the firm. The question from a regulator or a client will no longer be “Did you file your report?” but “How does your [execution price](https://prime.greeks.live/area/execution-price/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) compare to the consolidated market data for that instrument at that specific moment in time?”.

![Abstract geometry illustrates interconnected institutional trading pathways. Intersecting metallic elements converge at a central hub, symbolizing a liquidity pool or RFQ aggregation point for high-fidelity execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-cross-market-microstructure-for-digital-asset-derivatives.jpg)

![The abstract image visualizes a central Crypto Derivatives OS hub, precisely managing institutional trading workflows. Sharp, intersecting planes represent RFQ protocols extending to liquidity pools for options trading, ensuring high-fidelity execution and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-institutional-digital-asset-derivatives-prime-os-execution.jpg)

## Strategy

The strategic imperative for investment firms navigating the post-MiFIR review landscape is to fundamentally re-engineer their approach to best execution for derivatives. The previous strategy, largely centered on the production and publication of RTS 27 and [RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) reports, is now obsolete. That model was a compliance-oriented, defensive posture. The new strategy must be proactive, analytical, and data-centric.

It requires firms to move beyond mere compliance and build a robust, internal system that continuously demonstrates execution quality as a core operational capability. This is a shift from a periodic reporting function to a perpetual monitoring and evidence-generation system.

The core of this new strategy involves treating best execution not as a regulatory obligation to be met, but as a competitive advantage to be honed. This means investing in the technology, data infrastructure, and analytical talent required to perform sophisticated Transaction Cost Analysis (TCA) across a wide range of derivative instruments, including complex OTC products. The strategy must be built around the principle of ‘evidence-based execution.’ Every decision, from [venue selection](https://prime.greeks.live/area/venue-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to the choice of execution algorithm, must be justifiable with quantitative data. The abolition of the old reports clears the path for a more intelligent and effective approach, one that leverages the new streams of market data to achieve and prove superior execution outcomes.

![A transparent blue sphere, symbolizing precise Price Discovery and Implied Volatility, is central to a layered Principal's Operational Framework. This structure facilitates High-Fidelity Execution and RFQ Protocol processing across diverse Aggregated Liquidity Pools, revealing the intricate Market Microstructure of Institutional Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-execution-system-microstructure-principal-framework.jpg)

## From Static Reporting to Dynamic Evidence

The primary strategic pivot is the transition from a model of static, historical reporting to one of dynamic, real-time evidence generation. The RTS 27/28 framework encouraged a ‘rear-view mirror’ approach. Firms would aggregate data over a quarter or a year and publish it.

The utility of this data for improving future execution decisions was minimal. The new strategy demands a ‘forward-looking’ approach where data is used to inform and validate execution choices as they happen.

This requires a significant change in mindset and infrastructure. Firms must now focus on building a comprehensive internal data repository that captures not just their own [execution data](https://prime.greeks.live/area/execution-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), but also the newly available market-wide transparency data for derivatives. This repository becomes the foundation for the firm’s [best execution framework](https://prime.greeks.live/area/best-execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

The goal is to create a system that can answer, on demand, the critical question ▴ “Why was this the best possible result for our client?”. Answering this question requires a multi-faceted analysis that considers all the relevant execution factors.

> The objective is to build a living, breathing system of proof, not a static archive of past trades.

The following table illustrates the fundamental shift in strategic focus required by the MiFIR review:

| Strategic Dimension | Pre-Review Approach (RTS 27/28 Model) | Post-Review Approach (Evidence-Based Model) |
| --- | --- | --- |
| Primary Goal | Compliance with reporting obligations. Focus on timely and accurate filing of RTS 27 and RTS 28 reports. | Demonstration of execution quality. Focus on building a robust, data-driven case for every client execution. |
| Data Focus | Internal execution data, aggregated retrospectively for reporting purposes. | Integration of internal execution data with external market data (e.g. pre-trade quotes, post-trade CT data). |
| Analytical Approach | Largely descriptive. Reporting on top five venues and basic execution quality metrics. | Deeply analytical. Sophisticated TCA comparing executions against market benchmarks and alternative strategies. |
| Technology Requirement | Systems for data aggregation and report generation. | Advanced data management platforms, real-time data feeds, and sophisticated TCA tooling. |
| Supervisory Interaction | Proving that reports were published correctly. | Proving that the firm’s execution policy and monitoring are effective in achieving best execution. |
| Client Value | Limited. Reports were rarely used by investors and offered little actionable insight. | High. Demonstrable proof of execution quality builds trust and justifies execution choices. |

![An abstract digital interface features a dark circular screen with two luminous dots, one teal and one grey, symbolizing active and pending private quotation statuses within an RFQ protocol. Below, sharp parallel lines in black, beige, and grey delineate distinct liquidity pools and execution pathways for multi-leg spread strategies, reflecting market microstructure and high-fidelity execution for institutional grade digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-displaying-multi-leg-execution-status-and-optimal-liquidity-pathways.jpg)

## Leveraging the New Derivatives Transparency Landscape

A key pillar of the new strategy is to harness the enhanced transparency in the derivatives market. The introduction of a dedicated pre- and post-trade transparency regime for derivatives provides a wealth of new data that was previously unavailable or inconsistent. Strategically, firms must re-architect their data ingestion and analysis capabilities to capitalize on this.

![A sophisticated dark-hued institutional-grade digital asset derivatives platform interface, featuring a glowing aperture symbolizing active RFQ price discovery and high-fidelity execution. The integrated intelligence layer facilitates atomic settlement and multi-leg spread processing, optimizing market microstructure for prime brokerage operations and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-rfq-engine-intelligence-layer.jpg)

## What Is the Strategic Value of Pre-Trade Data?

The expanded pre-trade transparency obligations for trading venues mean that for many standardized derivatives, there will be a public record of bids and offers. This data is invaluable. It provides a real-time snapshot of market depth and liquidity. A firm’s strategy must include capturing this pre-trade data and using it as a benchmark for its own execution.

For example, when executing a large order via an RFQ (Request for Quote) protocol, the firm can now compare the quotes it receives from liquidity providers against the prices visible on lit order books. This allows the firm to quantitatively assess the quality of the quotes it is receiving and to challenge providers who are consistently off-market. It transforms the RFQ process from a purely bilateral negotiation into a market-informed one.

![A complex core mechanism with two structured arms illustrates a Principal Crypto Derivatives OS executing RFQ protocols. This system enables price discovery and high-fidelity execution for institutional digital asset derivatives block trades, optimizing market microstructure and capital efficiency via private quotations](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-execution-protocol-system.jpg)

## How Does Post-Trade Data Reshape TCA?

The combination of expanded post-trade transparency for OTC derivatives and the eventual arrival of the Consolidated Tape will revolutionize TCA for this asset class. Historically, a major challenge for derivatives TCA was the lack of a reliable post-trade benchmark. A firm could measure its execution against the arrival price, but it was difficult to know what other market participants were paying for the same instrument at the same time. The new post-trade data provides this context.

A firm’s TCA strategy must evolve to incorporate these new benchmarks. The analysis should now include metrics such as:

- **Price Slippage vs. Consolidated Tape** ▴ Measuring the difference between the firm’s execution price and the volume-weighted average price (VWAP) on the CT for a given time interval.

- **Quote-to-Trade Performance** ▴ For RFQ-based trades, analyzing the spread between the winning quote and the prevailing mid-price on the lit market at the time of execution.

- **Liquidity Capture Analysis** ▴ Assessing how much of the available liquidity at a given price point the firm’s execution managed to capture.

This level of analysis allows a firm to move from simply stating that it achieved a good price to proving it with verifiable, market-wide data. It provides a powerful tool for internal performance review, client reporting, and regulatory inquiries.

![Luminous central hub intersecting two sleek, symmetrical pathways, symbolizing a Principal's operational framework for institutional digital asset derivatives. Represents a liquidity pool facilitating atomic settlement via RFQ protocol streams for multi-leg spread execution, ensuring high-fidelity execution within a Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-pathways-optimized.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)

## Execution

Executing a best [execution framework](https://prime.greeks.live/area/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) for derivatives under the revised MiFIR requires a meticulous and systematic approach. It is an exercise in building a robust, defensible process that is deeply integrated into the firm’s trading and compliance infrastructure. The focus must be on operationalizing the principles of evidence-based execution.

This involves a granular focus on data management, analytical modeling, and governance. The abstract requirement to “take all sufficient steps” must be translated into a concrete set of operational procedures, technological systems, and quantitative checks that can withstand intense scrutiny from clients and regulators.

The execution of this new framework can be broken down into several key operational streams. These include the re-architecture of the firm’s [Best Execution Policy](https://prime.greeks.live/area/best-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), the development of a sophisticated TCA capability for derivatives, the establishment of a dynamic venue selection process, and the implementation of a rigorous governance and oversight structure. Each of these streams requires a dedicated effort and a clear understanding of how it contributes to the overall goal of demonstrating optimal execution.

![Abstract institutional-grade Crypto Derivatives OS. Metallic trusses depict market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-market-microstructure-optimizing-rfq-protocols-for-high-fidelity-execution-via-prime-os.jpg)

## The Operational Playbook a Re-Architected Best Execution Policy

The firm’s Best [Execution Policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is the foundational document that governs its approach. Under the new regime, this policy must be a living document, not a static compliance artifact. It needs to be updated to reflect the demise of RTS 27/28 and the new emphasis on data-driven proof. The policy must be highly specific about how the firm will handle derivatives execution.

An operational checklist for re-architecting the policy would include the following steps:

- **Explicitly Address the Removal of RTS 27/28** ▴ The policy should acknowledge that these reports are no longer produced and state clearly how the firm will now monitor execution quality and venue performance in their absence.

- **Detail the Use of New Transparency Data** ▴ The policy must specify how the firm will incorporate pre-trade and post-trade transparency data for derivatives into its execution monitoring. This should include details on the data sources, how the data is captured, and how it is used in TCA.

- **Define the Derivatives TCA Framework** ▴ The policy should outline the key metrics that will be used to measure execution quality for different types of derivatives (e.g. futures, options, swaps, OTC products). It should explain how benchmarks like VWAP (derived from the CT) will be used.

- **Establish a Dynamic Venue Review Process** ▴ The policy needs to describe the process for the ongoing review of execution venues. This process must be based on a combination of quantitative data (from the firm’s TCA) and qualitative factors (e.g. venue reliability, technology, counterparty risk).

- **Specify Governance and Oversight** ▴ The policy must clearly define the roles and responsibilities for overseeing the best execution framework. This includes identifying the committee or individuals responsible for reviewing TCA results, approving changes to the policy, and handling regulatory inquiries.

![A central hub with a teal ring represents a Principal's Operational Framework. Interconnected spherical execution nodes symbolize precise Algorithmic Execution and Liquidity Aggregation via RFQ Protocol](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-microstructure-prime-os-price-liquidity-alpha.jpg)

## Quantitative Modeling and Data Analysis

At the heart of the new best execution framework is a powerful [quantitative analysis](https://prime.greeks.live/area/quantitative-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) capability. Firms must be able to process large volumes of data and apply sophisticated models to assess execution quality. This requires investment in both technology and talent. The goal is to create a TCA system that can provide granular insights into the performance of every derivatives trade.

The data inputs for this system are critical. A firm’s internal trade data must be enriched with external market data to provide context. The following table provides an example of the kind of enriched data set that a firm would need to build for its derivatives TCA:

| Data Field | Description | Source | Analytical Purpose |
| --- | --- | --- | --- |
| Trade Timestamp | Nanosecond-level timestamp of the execution. | Internal OMS/EMS | Core identifier for linking with market data. |
| Instrument Identifier | Unique ID for the derivative (e.g. ISIN, UPI). | Internal | Instrument identification. |
| Execution Price | The price at which the trade was executed. | Internal | Primary input for price-based TCA metrics. |
| Order Arrival Price | The market mid-price at the time the order was received. | Market Data Feed | Benchmark for measuring implementation shortfall. |
| Pre-Trade Lit Market BBO | The best bid and offer on public order books at the time of execution. | Market Data Feed | Provides a benchmark for the quality of RFQ quotes. |
| Consolidated Tape VWAP (1-min) | The volume-weighted average price from the CT for the 1-minute interval around the trade. | Consolidated Tape | A robust post-trade benchmark for assessing price quality. |
| Execution Venue | The venue where the trade was executed. | Internal | Allows for venue-specific performance analysis. |
| Execution Protocol | The method of execution (e.g. Lit Order Book, RFQ, Auction). | Internal | Enables comparison of different execution strategies. |

With this data set, a firm can build quantitative models to answer key questions. For instance, a regression model could be used to identify the factors that have the most significant impact on execution costs for a particular type of derivative. This kind of analysis allows the firm to continuously refine its execution strategies and to provide clients with concrete evidence of the value it is providing.

![Glowing circular forms symbolize institutional liquidity pools and aggregated inquiry nodes for digital asset derivatives. Blue pathways depict RFQ protocol execution and smart order routing](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-prime-os-execution-microstructure.jpg)

## How Should Firms Approach Venue Selection Now?

Without RTS 27 reports, which provided standardized data on execution quality from venues, firms must develop their own rigorous process for selecting and monitoring execution venues. This process must be systematic and evidence-based. It should combine quantitative analysis from the firm’s own TCA with a thorough qualitative assessment.

The quantitative part of the analysis should draw directly from the firm’s TCA system. For each venue used, the firm should track metrics such as:

- **Average Price Improvement/Slippage** ▴ How does the execution price on this venue typically compare to market benchmarks?

- **Fill Rates and Rejection Rates** ▴ How reliable is the venue in executing orders?

- **Latency** ▴ How quickly does the venue acknowledge and execute orders?

The qualitative assessment is equally important. It should cover factors that are not easily captured by data, such as:

- **Technology and Connectivity** ▴ Does the venue offer robust and resilient technology? What are the options for connectivity (e.g. API, FIX)?

- **Counterparty and Operational Risk** ▴ What is the financial strength of the venue operator? What are their procedures for handling operational issues?

- **Liquidity Profile** ▴ What kind of liquidity is available on the venue? Is it dominated by a few large market makers, or is it more diverse?

- **Cost Structure** ▴ What are the execution fees? Are there any hidden costs?

This combined quantitative and qualitative assessment should be conducted regularly (e.g. quarterly) and the results should be formally documented. This documentation provides a clear audit trail that justifies the firm’s choice of execution venues and demonstrates that it is taking a diligent and systematic approach to achieving best execution.

![An abstract, symmetrical four-pointed design embodies a Principal's advanced Crypto Derivatives OS. Its intricate core signifies the Intelligence Layer, enabling high-fidelity execution and precise price discovery across diverse liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine.jpg)

## References

- European Securities and Markets Authority. “Final Report ▴ Draft Regulatory Technical Standards on the Market in Financial Instruments Regulation (MiFIR).” ESMA/2015/1464, 28 Sept. 2015.

- European Parliament and Council. “Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012.” Official Journal of the European Union, L 173/84, 12 June 2014.

- European Parliament. “Legislative resolution of 16 January 2024 on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 600/2014 as regards enhancing market data transparency, removing obstacles to the emergence of a consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding client orders.” P9_TA(2024)0019, 16 Jan. 2024.

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

- O’Hara, Maureen. Market Microstructure Theory. Blackwell Publishing, 1995.

- Khwaja, Amir. “MiFID II and Best Execution for Derivatives.” Tradeweb Markets, 22 Oct. 2015.

- MAP S.Platis. “MiFID II and MiFIR Review ▴ Key Changes and Implications.” 9 Oct. 2024.

- PwC Legal. “MiFIR/MiFID II Review ▴ making sense of the key amendments.” 4 June 2024.

![Abstract geometric forms depict multi-leg spread execution via advanced RFQ protocols. Intersecting blades symbolize aggregated liquidity from diverse market makers, enabling optimal price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-multi-leg-rfq-execution-orchestration.jpg)

## Reflection

The changes mandated by the MiFIR Review compel a moment of profound institutional introspection. The core challenge presented is not one of compliance, but of capability. The regulatory shift forces a critical question upon every firm ▴ is our operational architecture designed merely to meet obligations, or is it engineered to generate a persistent, data-driven execution advantage? The removal of prescriptive reporting is an invitation to move beyond a defensive posture and to construct a system of intelligence that is both a shield against regulatory scrutiny and a sword in the competitive arena.

Consider the data flowing into your organization. Is it treated as a compliance byproduct, destined for an archive? Or is it viewed as a strategic asset, the raw material for refining execution logic and proving value to clients? The new framework rewards the latter.

It favors firms that can transform the torrent of market transparency data into coherent, actionable insights. This requires more than just technology; it demands an organizational culture that values analytical rigor and views the pursuit of optimal execution as a central, dynamic, and unending process. The ultimate reflection is this ▴ in a world where execution quality must be proven, not just declared, does your firm possess the systemic integrity to validate every single trade?

![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)

## What Is the True Cost of Inaction?

The temptation may be to view the removal of RTS 27/28 as a cost-saving measure, an opportunity to decommission legacy reporting systems without replacing their function. This perspective is a strategic error. The true cost of inaction is the acceptance of an unquantified and undefended execution process. In the new environment, a lack of evidence is not neutral; it is an implicit admission of weakness.

Regulators and sophisticated clients will increasingly demand quantitative proof of value. Firms that cannot provide it will be at a significant disadvantage, exposed to regulatory risk, client attrition, and competitive pressure. The investment in a modern, evidence-based execution framework is an investment in the firm’s long-term viability and credibility in the marketplace.

![A sleek, institutional-grade Prime RFQ component features intersecting transparent blades with a glowing core. This visualizes a precise RFQ execution engine, enabling high-fidelity execution and dynamic price discovery for digital asset derivatives, optimizing market microstructure for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-engine-for-best-execution-microstructure.jpg)

## Glossary

<a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek, dark grey mechanism, pivoted centrally, embodies an RFQ protocol engine for institutional digital asset derivatives. Diagonally intersecting planes of dark, beige, teal symbolize diverse liquidity pools and complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-powering-high-fidelity-execution-for-multi-leg-spreads-portfolio-margin-and-atomic-settlement-via-prime-os-for-block-trades.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/mifir-review/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A crystalline sphere, representing aggregated price discovery and implied volatility, rests precisely on a secure execution rail. This symbolizes a Principal's high-fidelity execution within a sophisticated digital asset derivatives framework, connecting a prime brokerage gateway to a robust liquidity pipeline, ensuring atomic settlement and minimal slippage for institutional block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-execution-platform-optimizing-liquidity-and-risk-management-through-advanced-protocols.jpg)

## Mifir Review

Meaning ▴ The MiFIR Review refers to the ongoing legislative process undertaken by the European Commission to assess and propose amendments to the Markets in Financial Instruments Regulation (MiFIR) and Directive (MiFID II). </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">
![An advanced digital asset derivatives system features a central liquidity pool aperture, integrated with a high-fidelity execution engine. This Prime RFQ architecture supports RFQ protocols, enabling block trade processing and price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-protocol-execution-system-architecture.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/post-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A complex, intersecting arrangement of sleek, multi-colored blades illustrates institutional-grade digital asset derivatives trading. This visual metaphor represents a sophisticated Prime RFQ facilitating RFQ protocols, aggregating dark liquidity, and enabling high-fidelity execution for multi-leg spreads, optimizing capital efficiency and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/sophisticated-multi-asset-rfq-architecture-visualizing-institutional-digital-derivatives-execution-liquidity-aggregation-and-prime-os-orchestration-for-high-fidelity-performance.jpg)

## 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/market-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interlocking geometric forms, concentric circles, and a sharp diagonal element depict the intricate market microstructure of institutional digital asset derivatives. Concentric shapes symbolize deep liquidity pools and dynamic volatility surfaces](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-and-high-fidelity-execution.jpg)

## Market Data

Meaning ▴ Market Data comprises the real-time or historical pricing and trading information for financial instruments, encompassing bid and ask quotes, last trade prices, cumulative volume, and order book depth. </a><a href="https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Rts 27

Meaning ▴ RTS 27 mandates that investment firms and market operators publish detailed data on the quality of execution of transactions on their venues. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A metallic sphere, symbolizing a Prime Brokerage Crypto Derivatives OS, emits sharp, angular blades. These represent High-Fidelity Execution and Algorithmic Trading strategies, visually interpreting Market Microstructure and Price Discovery within RFQ protocols for Institutional Grade Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-intelligence-layer-system.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/consolidated-tape/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Consolidated Tape

Meaning ▴ The Consolidated Tape refers to the real-time stream of last-sale price and volume data for exchange-listed securities across all U.S. </a><a href="https://prime.greeks.live/area/post-trade-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central, metallic, multi-bladed mechanism, symbolizing a core execution engine or RFQ hub, emits luminous teal data streams. These streams traverse through fragmented, transparent structures, representing dynamic market microstructure, high-fidelity price discovery, and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/principal-grade-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-optimal-price-discovery-across-fragmented-market-microstructure.jpg)

## Post-Trade Data

Meaning ▴ Post-Trade Data comprises all information generated subsequent to the execution of a trade, encompassing confirmation, allocation, clearing, and settlement details. </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">
![Sleek, engineered components depict an institutional-grade Execution Management System. The prominent dark structure represents high-fidelity execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-optimized-price-discovery-high-fidelity-execution-and-market-microstructure.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/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central teal sphere, representing the Principal's Prime RFQ, anchors radiating grey and teal blades, signifying diverse liquidity pools and high-fidelity execution paths for digital asset derivatives. Transparent overlays suggest pre-trade analytics and volatility surface dynamics](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-and-market-microstructure.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/venue-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstractly depicting an Institutional Digital Asset Derivatives ecosystem. A robust base supports intersecting conduits, symbolizing multi-leg spread execution and smart order routing](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-optimization.jpg)

## Venue Selection

Meaning ▴ Venue Selection refers to the algorithmic process of dynamically determining the optimal trading venue for an order based on a comprehensive set of predefined criteria. </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">
![Central translucent blue sphere represents RFQ price discovery for institutional digital asset derivatives. Concentric metallic rings symbolize liquidity pool aggregation and multi-leg spread execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-high-fidelity-execution-1.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/execution-data/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A textured spherical digital asset, resembling a lunar body with a central glowing aperture, is bisected by two intersecting, planar liquidity streams. This depicts institutional RFQ protocol, optimizing block trade execution, price discovery, and multi-leg options strategies with high-fidelity execution within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-optimized-rfq-execution-protocol-dynamic-liquidity-management.jpg)

## Execution Data

Meaning ▴ Execution Data comprises the comprehensive, time-stamped record of all events pertaining to an order's lifecycle within a trading system, from its initial submission to final settlement. </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 Principal's RFQ engine core unit, featuring distinct algorithmic matching probes for high-fidelity execution and liquidity aggregation. This price discovery mechanism leverages private quotation pathways, optimizing crypto derivatives OS operations for atomic settlement within its systemic architecture](https://options.greeks.live/wp-content/uploads/2025/08/principals-rfq-engine-driving-optimal-digital-asset-derivatives.jpg)

## 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/best-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A stylized rendering illustrates a robust RFQ protocol within an institutional market microstructure, depicting high-fidelity execution of digital asset derivatives. A transparent mechanism channels a precise order, symbolizing efficient price discovery and atomic settlement for block trades via a prime brokerage system](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-execution-digital-asset-derivatives-options-high-fidelity-trading.jpg)

## Best Execution Policy

Meaning ▴ The Best Execution Policy defines the obligation for a broker-dealer or trading firm to execute client orders on terms most favorable to the client. </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 sleek, multi-segmented sphere embodies a Principal's operational framework for institutional digital asset derivatives. Its transparent 'intelligence layer' signifies high-fidelity execution and price discovery via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-digital-asset-derivatives-execution-engine.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/quantitative-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract, sleek forms represent an institutional-grade Prime RFQ for digital asset derivatives. Interlocking elements denote RFQ protocol optimization and price discovery across dark pools](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-5.jpg)

## Quantitative Analysis

Meaning ▴ Quantitative Analysis involves the application of mathematical, statistical, and computational methods to financial data for the purpose of identifying patterns, forecasting market movements, and making informed investment or trading decisions. </a>

**Tags:** [Market Microstructure](https://options.greeks.live/area/market-microstructure/), [Derivatives Transparency](https://options.greeks.live/area/derivatives-transparency/), [Execution Data](https://options.greeks.live/area/execution-data/), [Venue Selection](https://options.greeks.live/area/venue-selection/), [Best Execution](https://options.greeks.live/area/best-execution/), [RTS 28](https://options.greeks.live/area/rts-28/)	

## Discover More

- 
### [How Did MiFID II Change the Definition of Best Execution for Firms?](https://options.greeks.live/question/how-did-mifid-ii-change-the-definition-of-best-execution-for-firms/)
![Precision-engineered modular components, with transparent elements and metallic conduits, depict a robust RFQ Protocol engine. This architecture facilitates high-fidelity execution for institutional digital asset derivatives, enabling efficient liquidity aggregation and atomic settlement within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-optimizing-high-fidelity-execution-and-liquidity-aggregation.jpg)

MiFID II transformed best execution from a price-focused goal into a continuous, data-driven process of optimizing total client outcome.

- 
### [Can Price Improvement Alone Serve as a Sufficient Metric for Proving Best Execution Compliance?](https://options.greeks.live/question/can-price-improvement-alone-serve-as-a-sufficient-metric-for-proving-best-execution-compliance/)
![A sophisticated modular component of a Crypto Derivatives OS, featuring an intelligence layer for real-time market microstructure analysis. Its precision engineering facilitates high-fidelity execution of digital asset derivatives via RFQ protocols, ensuring optimal price discovery and capital efficiency for institutional participants.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-module.jpg)

Price improvement is a component, not the definition; best execution is proven by the verifiable integrity of the entire trading process.

- 
### [How Does the Concept of a Consolidated Tape in Equities Affect Its Best Execution Framework Compared to Options?](https://options.greeks.live/question/how-does-the-concept-of-a-consolidated-tape-in-equities-affect-its-best-execution-framework-compared-to-options/)
![An institutional-grade platform's RFQ protocol interface, with a price discovery engine and precision guides, enables high-fidelity execution for digital asset derivatives. Integrated controls optimize market microstructure and liquidity aggregation within a Principal's operational framework.](https://options.greeks.live/wp-content/uploads/2025/07/proprietary-institutional-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-granular-market-microstructure-analysis-for-prime-os.jpg)

The equity consolidated tape provides a public benchmark for best execution; in options, firms must build a proprietary one.

- 
### [What Are the Regulatory Requirements for Proving Best Execution When Using Off-Exchange Venues?](https://options.greeks.live/question/what-are-the-regulatory-requirements-for-proving-best-execution-when-using-off-exchange-venues/)
![A sophisticated, multi-component system propels a sleek, teal-colored digital asset derivative trade. The complex internal structure represents a proprietary RFQ protocol engine with liquidity aggregation and price discovery mechanisms. This visualizes high-fidelity execution of Bitcoin options or Ethereum futures, demonstrating capital efficiency and slippage minimization within a market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/principals-high-fidelity-rfq-engine-for-digital-asset-derivatives-execution.jpg)

Proving best execution in off-exchange venues requires a data-driven system demonstrating superior results against all reasonable alternatives.

- 
### [How Can Firms Use RTS 27 and RTS 28 Data to Gain a Competitive Advantage in the Market?](https://options.greeks.live/question/how-can-firms-use-rts-27-and-rts-28-data-to-gain-a-competitive-advantage-in-the-market/)
![A sleek, abstract system interface with a central spherical lens representing real-time Price Discovery and Implied Volatility analysis for institutional Digital Asset Derivatives. Its precise contours signify High-Fidelity Execution and robust RFQ protocol orchestration, managing latent liquidity and minimizing slippage for optimized Alpha Generation.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-institutional-digital-asset-derivatives-execution-via-optimized-rfq-protocols-enhancing-market-microstructure.jpg)

Firms gain advantage by transforming RTS 27/28 compliance data into strategic intelligence for superior execution.

- 
### [Can a Buy-Side Firm Rely Solely on Systematic Internalisers and Still Fulfill Its Best Execution Obligations?](https://options.greeks.live/question/can-a-buy-side-firm-rely-solely-on-systematic-internalisers-and-still-fulfill-its-best-execution-obligations/)
![A futuristic metallic optical system, featuring a sharp, blade-like component, symbolizes an institutional-grade platform. It enables high-fidelity execution of digital asset derivatives, optimizing market microstructure via precise RFQ protocols, ensuring efficient price discovery and robust portfolio margin.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-for-high-fidelity-rfq-execution-and-optimal-price-discovery.jpg)

A buy-side firm's reliance solely on SIs for best execution is theoretically possible but practically indefensible without a superior, continuous, and evidence-based monitoring system.

- 
### [How Does MiFID II Redefine the Concept of Best Execution for Algorithmic Strategies?](https://options.greeks.live/question/how-does-mifid-ii-redefine-the-concept-of-best-execution-for-algorithmic-strategies/)
![A sleek, futuristic mechanism showcases a large reflective blue dome with intricate internal gears, connected by precise metallic bars to a smaller sphere. This embodies an institutional-grade Crypto Derivatives OS, optimizing RFQ protocols for high-fidelity execution, managing liquidity pools, and enabling efficient price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-facilitating-high-fidelity-execution-and-optimal-market-microstructure-with-prime-os-intelligence.jpg)

MiFID II transforms best execution for algorithms into a continuous, evidence-based duty to prove optimal outcomes across all execution factors.

- 
### [What Regulatory Frameworks like MiFID II Govern the Use of Smart Order Routers for Best Execution?](https://options.greeks.live/question/what-regulatory-frameworks-like-mifid-ii-govern-the-use-of-smart-order-routers-for-best-execution/)
![A precision digital token, subtly green with a '0' marker, meticulously engages a sleek, white institutional-grade platform. This symbolizes secure RFQ protocol initiation for high-fidelity execution of complex multi-leg spread strategies, optimizing portfolio margin and capital efficiency within a Principal's Crypto Derivatives OS.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-platform-secure-rfq-protocol-initiation-for-optimal-block-trade-execution.jpg)

MiFID II governs SORs by mandating a verifiable, data-driven process to secure the best possible client execution across fragmented venues.

- 
### [How Do Regulatory Changes like MiFID II Impact Information Leakage and Best Execution Requirements for Institutions?](https://options.greeks.live/question/how-do-regulatory-changes-like-mifid-ii-impact-information-leakage-and-best-execution-requirements-for-institutions/)
![A vertically stacked assembly of diverse metallic and polymer components, resembling a modular lens system, visually represents the layered architecture of institutional digital asset derivatives. Each distinct ring signifies a critical market microstructure element, from RFQ protocol layers to aggregated liquidity pools, ensuring high-fidelity execution and capital efficiency within a Prime RFQ framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-execution-stack.jpg)

MiFID II elevates best execution to a data-driven mandate, forcing institutions to manage information leakage across a fragmented venue ecosystem.

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        "caption": "This advanced modular infrastructure visually represents a cutting-edge institutional RFQ execution system, designed for atomic settlement of digital asset derivatives. It exemplifies precise market microstructure interaction, enabling optimal liquidity aggregation and best execution across diverse venues. The system supports complex multi-leg spread strategies, mitigating counterparty risk through a robust Prime RFQ, ensuring pre-trade analytics and post-trade reporting for superior alpha generation."
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                "text": "The expanded pre-trade transparency obligations for trading venues mean that for many standardized derivatives, there will be a public record of bids and offers. This data is invaluable. It provides a real-time snapshot of market depth and liquidity. A firm's strategy must include capturing this pre-trade data and using it as a benchmark for its own execution. For example, when executing a large order via an RFQ (Request for Quote) protocol, the firm can now compare the quotes it receives from liquidity providers against the prices visible on lit order books. This allows the firm to quantitatively assess the quality of the quotes it is receiving and to challenge providers who are consistently off-market. It transforms the RFQ process from a purely bilateral negotiation into a market-informed one."
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                "text": "The combination of expanded post-trade transparency for OTC derivatives and the eventual arrival of the Consolidated Tape will revolutionize TCA for this asset class. Historically, a major challenge for derivatives TCA was the lack of a reliable post-trade benchmark. A firm could measure its execution against the arrival price, but it was difficult to know what other market participants were paying for the same instrument at the same time. The new post-trade data provides this context. A firm's TCA strategy must evolve to incorporate these new benchmarks. The analysis should now include metrics such as:"
            }
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                "text": "Without RTS 27 reports, which provided standardized data on execution quality from venues, firms must develop their own rigorous process for selecting and monitoring execution venues. This process must be systematic and evidence-based. It should combine quantitative analysis from the firm's own TCA with a thorough qualitative assessment."
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                "text": "The temptation may be to view the removal of RTS 27/28 as a cost-saving measure, an opportunity to decommission legacy reporting systems without replacing their function. This perspective is a strategic error. The true cost of inaction is the acceptance of an unquantified and undefended execution process. In the new environment, a lack of evidence is not neutral; it is an implicit admission of weakness. Regulators and sophisticated clients will increasingly demand quantitative proof of value. Firms that cannot provide it will be at a significant disadvantage, exposed to regulatory risk, client attrition, and competitive pressure. The investment in a modern, evidence-based execution framework is an investment in the firm's long-term viability and credibility in the marketplace."
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```


---

**Original URL:** https://options.greeks.live/question/how-does-the-mifir-review-impact-best-execution-obligations-for-derivatives/
