# How Have Regulations like MiFID II Specifically Addressed the Issue of Quote Durability? ▴ Question

**Published:** 2025-09-02
**Categories:** Question

---

![A glowing green torus embodies a secure Atomic Settlement Liquidity Pool within a Principal's Operational Framework. Its luminescence highlights Price Discovery and High-Fidelity Execution for Institutional Grade Digital Asset Derivatives](https://options.greeks.live/wp-content/uploads/2025/07/illuminated-rfq-protocols-for-institutional-digital-asset-derivatives-trading.jpg)

![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)

## Concept

![Abstract geometric forms converge around a central RFQ protocol engine, symbolizing institutional digital asset derivatives trading. Transparent elements represent real-time market data and algorithmic execution paths, while solid panels denote principal liquidity and robust counterparty relationships](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-for-high-fidelity-execution.jpg)

## The Recalibration of Liquidity Incentives

[MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) did not simply impose rules upon market participants; it re-engineered the foundational protocols governing how liquidity is provided and engaged with across European markets. At the heart of this systemic overhaul is the treatment of [quote durability](https://prime.greeks.live/area/quote-durability/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) ▴ the principle that a displayed price should be firm and reliably accessible for a reasonable period. The regulation’s approach was to address the ephemeral, flickering liquidity that characterized certain segments of the market, which could undermine efficient price formation and disadvantage end investors. By creating a more robust framework for quoting obligations, MiFID II sought to ensure that displayed prices were genuine expressions of trading intent, thereby fostering a more stable and trustworthy market environment.

The primary mechanism for this recalibration was the expansion and formalization of the [Systematic Internaliser](https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SI) regime. An SI is an investment firm that deals on its own account by executing client orders outside of a traditional trading venue on an organized, frequent, systematic, and substantial basis. Before MiFID II, this activity, particularly in non-equity markets, operated with less [pre-trade transparency](https://prime.greeks.live/area/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The regulation brought this significant volume of over-the-counter (OTC) trading into a structured framework, mandating that SIs publish firm quotes in liquid instruments when prompted by a client.

This obligation transformed the nature of quote provision. A displayed price from an SI was no longer merely an indication but became a binding commitment, subject to specific conditions, fundamentally altering the risk-reward calculation for liquidity providers.

![A sleek, disc-shaped system, with concentric rings and a central dome, visually represents an advanced Principal's operational framework. It integrates RFQ protocols for institutional digital asset derivatives, facilitating liquidity aggregation, high-fidelity execution, and real-time risk management](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-engine-digital-asset-derivatives-execution.jpg)

## Systematic Internalisers as a Locus of Stability

The SI regime under MiFID II serves as a critical node in the network of European market structure, designed to enhance pre-trade transparency without completely centralizing all trading onto public exchanges. For liquid instruments, SIs are obligated to provide firm, two-way quotes that are accessible to their clients, ensuring a baseline of executable prices is always available. This creates a competitive dynamic where SI quotes must contend with those on regulated markets and Multilateral Trading Facilities (MTFs), contributing to the overall price discovery process. The regulation acknowledges the operational realities of market-making by allowing SIs to update their quotes at any time and to withdraw them under exceptional market conditions, providing a necessary degree of flexibility.

> The core innovation of the MiFID II framework was to tie quoting obligations directly to the substantial internalization of order flow, creating a class of market participants with explicit responsibilities for price stability.

Furthermore, to ensure a level playing field and prevent regulatory arbitrage, MiFID II introduced rules to align SI quoting practices with those on traditional venues. A key aspect of this was the application of the [tick size regime](https://prime.greeks.live/area/tick-size-regime/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) to SI quotes for equity instruments. This harmonization prevents SIs from offering marginal price improvements that are smaller than the minimum tick size on an exchange, which could fragment liquidity and disadvantage public venues. By mandating that SI quotes reflect “prevailing market conditions” and adhere to established price increments, the regulation ensures that competition is based on substantive price and size improvement, reinforcing the integrity of the price formation mechanism across all trading environments.

![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)

![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)

## Strategy

![Glossy, intersecting forms in beige, blue, and teal embody RFQ protocol efficiency, atomic settlement, and aggregated liquidity for institutional digital asset derivatives. The sleek design reflects high-fidelity execution, prime brokerage capabilities, and optimized order book dynamics for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-digital-asset-derivatives-execution-via-optimized-rfq-protocols-enhancing-principal-operational-frameworks.jpg)

## A Framework for Enforceable Quoting

The strategic intent behind MiFID II’s approach to quote durability is rooted in establishing a clear, enforceable framework that defines the responsibilities of major liquidity providers. The regulation moved beyond abstract principles of fair dealing to codify the specific obligations of firms that play a systemic role in the market. By defining what constitutes a “[firm quote](https://prime.greeks.live/area/firm-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” and the conditions under which it must be provided, MiFID II created a predictable and reliable environment for those seeking to execute trades. This strategy hinges on the idea that enforceable commitments are the bedrock of a stable market, reducing the incidence of “phantom liquidity” where quotes disappear the moment a counterparty attempts to engage with them.

The SI regime is the central pillar of this strategy. The qualification thresholds for becoming an SI are based on quantifiable metrics of trading activity, ensuring that firms handling a significant volume of client order flow are captured by the regime. Once designated as an SI for a particular instrument, a firm inherits a set of obligations that directly support quote durability. For liquid instruments, the requirement to provide a firm quote upon client request acts as a powerful stabilizing force.

This is a strategic departure from a model where all OTC [liquidity provision](https://prime.greeks.live/area/liquidity-provision/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is discretionary. The regulation effectively transforms a portion of the market into a source of reliable, on-demand liquidity, subject to regulatory oversight.

> MiFID II’s strategy was to create a system where firms profiting from internalized order flow contribute to market stability through binding quote obligations.

The regulation also incorporates a degree of strategic flexibility. SIs can manage their risk by updating prices and limiting the number of transactions executed against a single quote. This allows them to function effectively without being exposed to undue risk, such as being picked off by high-frequency traders during volatile periods.

The policy must be applied in a non-discriminatory manner, ensuring fair access for clients. This balance between obligation and flexibility is a key strategic element, designed to make the SI role viable for investment firms while still achieving the regulatory goal of enhanced market stability and transparency.

![Two distinct, polished spherical halves, beige and teal, reveal intricate internal market microstructure, connected by a central metallic shaft. This embodies an institutional-grade RFQ protocol for digital asset derivatives, enabling high-fidelity execution and atomic settlement across disparate liquidity pools for principal block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-prime-os.jpg)

## Comparative Market Structures

To fully appreciate the strategic positioning of the MiFID II framework, it is useful to compare the obligations of different market participants. The following table outlines the differing requirements related to quote provision across various entities, highlighting the specific role SIs are designed to play.

| Entity Type | Quoting Obligation Under MiFID II | Key Characteristic | Impact on Quote Durability |
| --- | --- | --- | --- |
| Regulated Market (RM) / MTF | Central limit order books display firm, anonymous quotes from all members. | Multilateral, transparent, and governed by exchange rules. | High durability, enforced by market rules and continuous order matching. |
| Systematic Internaliser (SI) | Must provide firm quotes to clients on request for liquid instruments. | Bilateral execution on principal’s account, subject to pre-trade transparency. | Enhanced durability in the OTC space through specific, binding obligations. |
| Standard OTC Dealer (Non-SI) | No general obligation to provide firm quotes; pricing is discretionary. | Purely bilateral and opaque pre-trade. | Low intrinsic durability; quotes are indicative until a trade is agreed. |
| Organised Trading Facility (OTF) | Discretionary order execution, typically for non-equity instruments. | Hybrid of bilateral and multilateral models, with operator discretion. | Variable durability, dependent on the specific rules and protocols of the OTF. |

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

## The Economic Rationale

The strategic underpinnings of MiFID II’s quote durability provisions are also economic. By mandating [firm quotes](https://prime.greeks.live/area/firm-quotes/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) from SIs, the regulation imposes a cost on providing liquidity, which helps to filter for more capitalized and committed market makers. This structure is intended to disincentivize the high-speed quoting and canceling strategies that can create an illusion of liquidity without providing substantive execution opportunities. The economic trade-off is that while the cost of market-making may increase for SIs, the quality and reliability of the liquidity they provide are significantly enhanced.

This approach has profound implications for [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). For buy-side firms, the existence of a network of SIs providing firm quotes creates a more competitive and transparent landscape for sourcing liquidity. Their best execution policies can incorporate the reliable quotes from SIs as a key input, allowing for more effective price discovery and reduced transaction costs.

The regulation’s design fosters a system where SIs compete not only with exchanges but also with each other, with quote integrity as a key dimension of that competition. This systemic pressure helps to ensure that the durability of quotes is maintained through a combination of regulatory mandate and market forces.

![Abstract system interface on a global data sphere, illustrating a sophisticated RFQ protocol for institutional digital asset derivatives. The glowing circuits represent market microstructure and high-fidelity execution within a Prime RFQ intelligence layer, facilitating price discovery and capital efficiency across liquidity pools](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-execution-prime-os.jpg)

![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)

## Execution

![A proprietary Prime RFQ platform featuring extending blue/teal components, representing a multi-leg options strategy or complex RFQ spread. The labeled band 'F331 46 1' denotes a specific strike price or option series within an aggregated inquiry for high-fidelity execution, showcasing granular market microstructure data points](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-1.jpg)

## Operationalizing the Systematic Internaliser Framework

The execution of MiFID II’s quote durability mandate required the creation of a detailed, data-driven operational framework. Investment firms must implement sophisticated systems to monitor their trading activity against the SI determination thresholds, which are calculated on an instrument-by-instrument basis. This process is not a one-time event; it is a continuous obligation that requires robust data capture and analysis capabilities. The European Securities and Markets Authority (ESMA) provides the reference data for these calculations, and firms must perform the assessment on a quarterly basis to determine if they meet the “frequent, systematic, and substantial” criteria for any given asset class.

Once a firm crosses the threshold and becomes an SI, a different set of operational protocols is triggered. The firm must have the technological infrastructure to publish firm quotes that are accessible to its clients. This involves connecting to Approved Publication Arrangements (APAs) for post-trade reporting and ensuring that their internal quoting systems can disseminate prices in a manner that complies with the regulation’s pre-trade transparency requirements.

The quotes must be held firm for a “reasonable period of time,” a principle that requires firms to establish clear internal policies on quote lifespan to demonstrate compliance to regulators. These systems must also be capable of managing risk by allowing for rapid price updates and executing the firm’s non-discriminatory client access policies.

> Executing the SI regime demands a fusion of regulatory reporting, real-time risk management, and client-facing technology to maintain continuous compliance.

The following list outlines the core operational steps for a firm navigating the SI regime:

- **Data Aggregation and Monitoring** ▴ The firm must aggregate all on-account trading data across every relevant financial instrument to compare against ESMA’s quantitative thresholds.

- **Quarterly SI Assessment** ▴ A formal, documented assessment must be conducted every three months to determine if the firm qualifies as an SI in any new instruments or ceases to qualify in others.

- **Public Declaration** ▴ Upon qualifying as an SI for an instrument, the firm must register this status with its national competent authority and make its SI status known to the market.

- **Technology Implementation** ▴ The firm must deploy and maintain systems capable of generating, disseminating, and managing firm quotes in compliance with MiFID II’s transparency and access rules.

- **Risk Management Configuration** ▴ Systems must be configured to apply limits on the number of transactions per quote and to manage client access based on a pre-defined, non-discriminatory commercial policy.

- **Compliance and Reporting** ▴ Ongoing monitoring and record-keeping are essential to demonstrate adherence to quoting obligations, including the duration for which quotes are held firm and the circumstances under which they are withdrawn.

![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)

## Quantitative Metrics and Compliance Thresholds

The determination of SI status is not subjective; it is based on precise quantitative thresholds defined by the regulation. Understanding these metrics is fundamental to executing a compliant trading operation. The table below provides a simplified overview of the two primary tests used to determine if a firm’s OTC trading activity in a specific instrument is “substantial.”

| SI Determination Test | Description | Example Threshold (Illustrative) | Operational Implication |
| --- | --- | --- | --- |
| Share of Total Market | The firm’s on-account trading in an instrument as a percentage of the total trading volume in that instrument within the EU. | ≥ 0.4% for an equity instrument. | Requires access to comprehensive market-wide trading data from ESMA. |
| Share of Own Trading | The firm’s on-account OTC trading in an instrument as a percentage of its total trading (on-venue and OTC) in that instrument. | ≥ 15% for a bond. | Requires meticulous internal data aggregation and classification. |

These quantitative tests are complemented by the “frequent and systematic” test, which is assessed based on the number of OTC trades executed in the instrument. A firm that exceeds any of these thresholds for a specific asset is mandated to operate as an SI for that asset. This data-centric approach removes ambiguity and forces a high degree of operational discipline.

Firms must have the data architecture to not only perform these calculations accurately but also to archive the results and methodologies for regulatory review. The execution of this framework is a significant undertaking, blending market data science with compliance technology.

![A luminous central hub with radiating arms signifies an institutional RFQ protocol engine. It embodies seamless liquidity aggregation and high-fidelity execution for multi-leg spread strategies](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-hub-for-optimal-liquidity-aggregation.jpg)

## References

- BaFin. (2017). Systematic internalisers ▴ Main points of the new supervisory regime under MiFID II. BaFin Perspectives, 2.

- Simmons & Simmons. (2024). MiFIR and MiFID II review ▴ ten key things that EU financial institutions should know.

- Association for Financial Markets in Europe (AFME). (2017). MiFID II implementation ▴ the Systematic Internaliser regime.

- European Securities and Markets Authority (ESMA). (2017). MiFID II ▴ ESMA consults on systematic internalisers’ quote rules.

- Deutsche Bank. (2017). MiFID II ▴ Systematic Internalisers ▴ Tick Sizes and Price Improvement. Global Market Structure ▴ Europe.

![A smooth, light-beige spherical module features a prominent black circular aperture with a vibrant blue internal glow. This represents a dedicated institutional grade sensor or intelligence layer for high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-intelligence-layer-for-optimal-digital-asset-rfq-execution.jpg)

## Reflection

![A sleek, light-colored, egg-shaped component precisely connects to a darker, ergonomic base, signifying high-fidelity integration. This modular design embodies an institutional-grade Crypto Derivatives OS, optimizing RFQ protocols for atomic settlement and best execution within a robust Principal's operational framework, enhancing market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-core-principal-system.jpg)

## An Evolving Market Operating System

The implementation of the Systematic Internaliser regime and its associated quoting obligations represents a fundamental update to the European market’s operating system. The knowledge of these protocols is a component of a much larger intelligence framework required to navigate modern financial markets. The regulations have established new pathways for liquidity and codified responsibilities that were previously implicit. This prompts a critical examination of one’s own operational structure.

How does your firm’s technology and strategy interface with this evolved architecture? Are your execution protocols designed to leverage the reliability of SI quotes, or do they still operate under assumptions from a previous market paradigm? The durability of a quote is now a function of a regulated system, and achieving a superior execution edge depends on understanding and integrating with that system at a foundational level. The potential for capital efficiency and risk management within this new design is substantial, awaiting those who can align their internal frameworks with the market’s external logic.

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

## Glossary

<a href="https://prime.greeks.live/area/quote-durability/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Quote Durability

Meaning ▴ Quote Durability refers to the measurable characteristic of a market maker's posted bid or ask prices, signifying the resilience and stability of these prices against immediate market events or incoming order flow pressure. </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 precision probe, symbolizing Smart Order Routing, penetrates a multi-faceted teal crystal, representing Digital Asset Derivatives multi-leg spreads and volatility surface. Mounted on a Prime RFQ base, it illustrates RFQ protocols for high-fidelity execution within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-digital-asset-derivatives-high-fidelity-execution-probe.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/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Illuminated conduits passing through a central, teal-hued processing unit abstractly depict an Institutional-Grade RFQ Protocol. This signifies High-Fidelity Execution of Digital Asset Derivatives, enabling Optimal Price Discovery and Aggregated Liquidity for Multi-Leg Spreads](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-best-execution.jpg)

## 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/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A transparent, blue-tinted sphere, anchored to a metallic base on a light surface, symbolizes an RFQ inquiry for digital asset derivatives. A fine line represents low-latency FIX Protocol for high-fidelity execution, optimizing price discovery in market microstructure via Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-rfq-protocol-sphere-high-fidelity-execution-gateway.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/tick-size-regime/?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)

## Tick Size Regime

Meaning ▴ A Tick Size Regime specifies the minimum allowable price increment for an asset's quotation and trading, directly influencing order book granularity and the fundamental mechanics of price discovery within a defined market segment. </a><a href="https://prime.greeks.live/area/firm-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interlocking dark modules with luminous data streams represent an institutional-grade Crypto Derivatives OS. It facilitates RFQ protocol integration for multi-leg spread execution, enabling high-fidelity execution, optimal price discovery, and capital efficiency in market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution.jpg)

## Firm Quote

Meaning ▴ A firm quote represents a binding commitment by a market participant to execute a specified quantity of an asset at a stated price for a defined duration. </a><a href="https://prime.greeks.live/area/liquidity-provision/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Central blue-grey modular components precisely interconnect, flanked by two off-white units. This visualizes an institutional grade RFQ protocol hub, enabling high-fidelity execution and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-core-interconnect-for-high-fidelity-execution.jpg)

## Liquidity Provision

Meaning ▴ Liquidity Provision is the systemic function of supplying bid and ask orders to a market, thereby narrowing the bid-ask spread and facilitating efficient asset exchange. </a><a href="https://prime.greeks.live/area/firm-quotes/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting opaque and luminous teal structures symbolize converging RFQ protocols for multi-leg spread execution. Surface droplets denote market microstructure granularity and slippage](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocols-for-digital-asset-derivatives-high-fidelity-execution.jpg)

## Firm Quotes

Meaning ▴ A Firm Quote represents a committed, executable price and size at which a market participant is obligated to trade for a specified duration. </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">
![Precision-engineered modular components display a central control, data input panel, and numerical values on cylindrical elements. This signifies an institutional Prime RFQ for digital asset derivatives, enabling RFQ protocol aggregation, high-fidelity execution, algorithmic price discovery, and volatility surface calibration for portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/firm-fx-options-rfq-trade-system-key-microstructure-data-flow-core-engine.jpg)

## Best Execution

Meaning ▴ Best Execution is the obligation to obtain the most favorable terms reasonably available for a client's order. </a>

**Tags:** [Financial Regulation](https://options.greeks.live/area/financial-regulation/), [Firm Quotes](https://options.greeks.live/area/firm-quotes/), [Firm Quote](https://options.greeks.live/area/firm-quote/), [Pre-Trade Transparency](https://options.greeks.live/area/pre-trade-transparency/), [Tick Size Regime](https://options.greeks.live/area/tick-size-regime/), [Liquidity Provision](https://options.greeks.live/area/liquidity-provision/)	

## Discover More

- 
### [How Do Regulatory Requirements like MiFID II Influence the Design of Smart Trading Systems?](https://options.greeks.live/question/how-do-regulatory-requirements-like-mifid-ii-influence-the-design-of-smart-trading-systems/)
![Sleek teal and beige forms converge, embodying institutional digital asset derivatives platforms. A central RFQ protocol hub with metallic blades signifies high-fidelity execution and price discovery. The composition illustrates market microstructure efficiency, atomic settlement capabilities, and robust counterparty risk management for block trade liquidity via a Principal OS.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-microstructure.jpg)

MiFID II refactors smart trading systems into auditable, multi-factor engines proving best execution through granular data and controls.

- 
### [How Do Systematic Internalisers Leverage Lis Thresholds to Offer Price Improvement to Institutional Clients?](https://options.greeks.live/question/how-do-systematic-internalisers-leverage-lis-thresholds-to-offer-price-improvement-to-institutional-clients/)
![A sleek, metallic platform features a sharp blade resting across its central dome. This visually represents the precision of institutional-grade digital asset derivatives RFQ execution. It symbolizes high-fidelity execution and atomic settlement within market microstructure, ensuring capital efficiency and mitigating counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision-1.jpg)

Systematic Internalisers use LIS waivers to execute large client orders privately, minimizing market impact and sharing internalized cost savings via price improvement.

- 
### [What Are the Specific Obligations for an SI When Responding to an RFQ for a Package Transaction?](https://options.greeks.live/question/what-are-the-specific-obligations-for-an-si-when-responding-to-an-rfq-for-a-package-transaction/)
![A sleek system component displays a translucent aqua-green sphere, symbolizing a liquidity pool or volatility surface for institutional digital asset derivatives. This Prime RFQ core, with a sharp metallic element, represents high-fidelity execution through RFQ protocols, smart order routing, and algorithmic trading within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-core-for-high-fidelity-execution.jpg)

An SI's core obligation for a package RFQ is to apply component-level transparency rules within a holistic risk framework.

- 
### [What Are the Core Technological Components Required to Operate as a Systematic Internaliser under MiFIR?](https://options.greeks.live/question/what-are-the-core-technological-components-required-to-operate-as-a-systematic-internaliser-under-mifir/)
![A sophisticated institutional-grade system's internal mechanics. A central metallic wheel, symbolizing an algorithmic trading engine, sits above glossy surfaces with luminous data pathways and execution triggers. This abstract visualizes high-fidelity execution for digital asset derivatives, optimizing market microstructure and RFQ protocol efficiency within a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-core.jpg)

A Systematic Internaliser's core technology is a regulated, high-performance engine for transparent principal trading and automated reporting.

- 
### [What Are the Key Differences in Block Trade Reporting between U.S. and European Regulations?](https://options.greeks.live/question/what-are-the-key-differences-in-block-trade-reporting-between-u-s-and-european-regulations/)
![A scratched blue sphere, representing market microstructure and liquidity pool for digital asset derivatives, encases a smooth teal sphere, symbolizing a private quotation via RFQ protocol. An institutional-grade structure suggests a Prime RFQ facilitating high-fidelity execution and managing counterparty risk.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-protocols-optimizing-digital-asset-derivative-execution-microstructure.jpg)

U.S. rules mandate immediate, real-time trade publication, while Europe permits structured reporting delays to protect large-scale liquidity.

- 
### [What Are the Key Regulatory Differences in Pre-Trade and Post-Trade Transparency?](https://options.greeks.live/question/what-are-the-key-regulatory-differences-in-pre-trade-and-post-trade-transparency/)
![Visualizes the core mechanism of an institutional-grade RFQ protocol engine, highlighting its market microstructure precision. Metallic components suggest high-fidelity execution for digital asset derivatives, enabling private quotation and block trade processing. This system minimizes slippage and optimizes price discovery for Bitcoin options.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-core-1.jpg)

Pre-trade transparency reveals intent for price discovery; post-trade confirms fact for market integrity and analysis.

- 
### [What Are the Regulatory Obligations Associated with Providing a Firm Quote under MiFID II?](https://options.greeks.live/question/what-are-the-regulatory-obligations-associated-with-providing-a-firm-quote-under-mifid-ii/)
![A precision optical system with a teal-hued lens and integrated control module symbolizes institutional-grade digital asset derivatives infrastructure. It facilitates RFQ protocols for high-fidelity execution, price discovery within market microstructure, algorithmic liquidity provision, and portfolio margin optimization via Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/08/principal-grade-digital-asset-derivatives-rfq-optics-for-high-fidelity-execution-and-optimized-liquidity.jpg)

MiFID II firm quote obligations mandate binding price commitments, shaping market microstructure and demanding sophisticated operational and technological integration for transparent liquidity provision.

- 
### [How Does the Liquidity of a Bond Affect the Quoting Obligations for a Systematic Internaliser?](https://options.greeks.live/question/how-does-the-liquidity-of-a-bond-affect-the-quoting-obligations-for-a-systematic-internaliser/)
![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. Pinned elements indicate precise RFQ protocol engagement and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-and-market-microstructure.jpg)

A bond's regulatory liquidity status directly dictates an SI's quoting obligation, bifurcating its operational risk and client engagement model.

- 
### [What Are the Key Regulatory Differences between an OTF and an MTF?](https://options.greeks.live/question/what-are-the-key-regulatory-differences-between-an-otf-and-an-mtf/)
![A precision-engineered metallic component with a central circular mechanism, secured by fasteners, embodies a Prime RFQ engine. It drives institutional liquidity and high-fidelity execution for digital asset derivatives, facilitating atomic settlement of block trades and private quotation within market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-platform-rfq-engine-for-high-fidelity-execution-and-atomic-settlement-of-block-trades.jpg)

An OTF permits discretionary execution for non-equities, while an MTF is a non-discretionary, rule-based system for multiple asset types.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "How Have Regulations like MiFID II Specifically Addressed the Issue of Quote Durability?",
            "item": "https://options.greeks.live/question/how-have-regulations-like-mifid-ii-specifically-addressed-the-issue-of-quote-durability/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "https://greeks.live/#organization",
    "name": "Greeks.Live",
    "url": "https://greeks.live/",
    "description": "Greeks.live is the definitive toolkit for the professional options trader, dedicated to empowering our users with institutional-grade data, advanced analytics, and a comprehensive suite of trading tools designed to provide a decisive edge in the market. Every article and guide published under the Greeks.live name is a product of our deep commitment to data-driven analysis and our mission to support the global trading community.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        }
    ],
    "sameAs": [
        "https://x.com/greekslive",
        "https://youtube.com/@greeks_live?si=-KjT0Lkw4WUCI0tD",
        "https://t.me/greekslive_notifications",
        "https://t.me/greekslive",
        "https://pinterest.com/greekslive/"
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Lending Tools",
                "url": "https://lend.greeks.live",
                "description": "Manage crypto lending and borrowing activities to earn yield or secure loans. This suite of tools helps users analyze interest rates and manage collateralized debt positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Profit & Loss Analysis (PnL)",
                "url": "https://greeks.live/#/deribit/tools/pnl_analysis",
                "description": "Track and analyze the Profit and Loss (PnL) of your options portfolio. This tool provides detailed performance metrics to help traders evaluate and refine their strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Position Visualization",
                "url": "https://greeks.live/#/deribit/tools/pv/BTC",
                "description": "Visualize complex options positions and their corresponding risk profiles. This tool generates payoff diagrams to help traders intuitively understand potential profit, loss, and exposure.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Calculator",
                "url": "https://greeks.live/#/deribit/tools/calculator",
                "description": "Calculate the theoretical price and risk parameters ('the Greeks') of crypto options. An essential tool for pricing new trades and analyzing the sensitivity of existing positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live Main Platform",
                "url": "https://greeks.live/",
                "description": "The central hub for the Greeks.live suite of professional cryptocurrency options and derivatives trading tools. Access analytics, manage positions, and explore the ecosystem.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Community Forum",
                "url": "https://t.greeks.live",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for Deribit",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for OKX",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "GLVS.AI Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "An AI-powered platform for automated crypto options trading. Leverage advanced algorithms and data-driven signals to develop and deploy sophisticated, hands-free trading strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "API Testnet & Sandbox",
                "url": "https://test.greeks.live",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        }
    ],
    "subOrganization": [
        {
            "@type": "Organization",
            "name": "GreeksLive HK Co., Limited",
            "email": "support@greeks.live",
            "telephone": "+852-56418949",
            "address": {
                "@type": "PostalAddress",
                "streetAddress": "Unit 11, 27/F, K. Wah Centre, 191 Java Road",
                "addressLocality": "Hong Kong",
                "addressRegion": "North Point",
                "addressCountry": "CN",
                "postalCode": "0000"
            },
            "geo": {
                "@type": "GeoCoordinates",
                "latitude": "22.2932357",
                "longitude": "114.2022026"
            },
            "image": "https://options.greeks.live/wp-content/uploads/2025/08/Wah-Centre-Hong-Kong.jpg"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/how-have-regulations-like-mifid-ii-specifically-addressed-the-issue-of-quote-durability/"
    },
    "headline": "How Have Regulations like MiFID II Specifically Addressed the Issue of Quote Durability? \u25b4 Question",
    "description": "MiFID II addressed quote durability by mandating Systematic Internalisers to provide firm, executable quotes, enhancing pre-trade transparency. \u25b4 Question",
    "url": "https://options.greeks.live/question/how-have-regulations-like-mifid-ii-specifically-addressed-the-issue-of-quote-durability/",
    "datePublished": "2025-09-02T12:58:07+00:00",
    "dateModified": "2025-09-02T12:58:09+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-execution-framework-for-institutional-digital-asset-derivatives-request-for-quote-protocol-optimization.jpg",
        "caption": "This abstract image depicts a sphere divided into two distinct halves, light and dark, revealing a bright core. It powerfully symbolizes the institutional trading lifecycle, specifically the Request for Quote RFQ protocol's role in achieving high-fidelity execution for digital asset derivatives. The split signifies precise atomic settlement and efficient price discovery, mitigating counterparty risk via a robust Prime RFQ. This intelligence layer ensures optimal capital efficiency for multi-leg spread strategies and institutional-grade block trades."
    },
    "keywords": [
        "Best Execution",
        "Financial Regulation",
        "Firm Quote",
        "Firm Quotes",
        "Liquidity Provision",
        "Market Microstructure",
        "MiFID II",
        "Over-The-Counter Trading",
        "Pre-Trade Transparency",
        "Quote Durability",
        "Systematic Internaliser",
        "Tick Size Regime"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://options.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://options.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```


---

**Original URL:** https://options.greeks.live/question/how-have-regulations-like-mifid-ii-specifically-addressed-the-issue-of-quote-durability/
