# How Should a Buy-Side Firm's Best Execution Policy Evolve to Incorporate Systematic Internalisers? ▴ Question

**Published:** 2025-08-04
**Categories:** Question

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![Two reflective, disc-like structures, one tilted, one flat, symbolize the Market Microstructure of Digital Asset Derivatives. This metaphor encapsulates RFQ Protocols and High-Fidelity Execution within a Liquidity Pool for Price Discovery, vital for a Principal's Operational Framework ensuring Atomic Settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-liquidity-aggregation-optimizing-market-microstructure-principal-trading-best-execution-atomic-settlement.jpg)

![Abstract visualization of institutional RFQ protocol for digital asset derivatives. Translucent layers symbolize dark liquidity pools within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-6.jpg)

## Concept

The integration of [Systematic Internalisers](https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SIs) into a buy-side firm’s [best execution policy](https://prime.greeks.live/area/best-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) represents a fundamental re-architecting of the firm’s market-facing infrastructure. Your existing policy, likely built for a world dominated by lit order books on Regulated Markets (RMs) and Multilateral Trading Facilities (MTFs), operates on a set of assumptions that the post-MiFID II landscape has systematically dismantled. The challenge is one of upgrading your firm’s core operational logic to recognize and harness a powerful, yet distinct, form of liquidity. The evolution required is an acknowledgment that the market is no longer a monolithic entity of centralized exchanges but a distributed system of interconnected liquidity pools, each with its own protocol and interaction model.

At its core, a [Systematic Internaliser](https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is an investment firm that executes client orders on its own account on an organized, frequent, and substantial basis. This is principal-based liquidity. When you interact with an SI, you are not interacting with a [central limit order book](https://prime.greeks.live/area/central-limit-order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite); you are interacting directly with the SI’s proprietary capital. This distinction is the central axis around which your entire policy must pivot.

The SI regime was designed to bring transparency and structure to what was previously bilateral, over-the-counter (OTC) trading, creating a formal [execution venue](https://prime.greeks.live/area/execution-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) category with specific obligations. Your policy must therefore treat SIs as a distinct class of execution venue, with a bespoke framework for selection, interaction, and evaluation.

The mandate of “[all sufficient steps](https://prime.greeks.live/area/all-sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” [under MiFID](https://prime.greeks.live/question/what-are-the-operational-consequences-of-misreporting-under-mifid-ii-versus-a-reporting-failure-under-emir/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) II compels a firm to demonstrate a robust and evidence-based process for achieving the best possible result for its clients. This requires a demonstrable, repeatable, and auditable methodology. Simply adding a line to your policy stating that you may use SIs is operationally and regulatorily insufficient.

The task is to build the analytical and technological framework that allows your traders to access SI liquidity intelligently and to prove, quantitatively, that doing so serves the client’s best interest. This involves a shift in perspective from merely connecting to venues to actively managing a portfolio of liquidity relationships.

> A firm’s best execution policy must evolve from a static document into a dynamic operational system that can quantify and control interactions with principal-based liquidity sources.

This evolution is not a matter of choice but a structural necessity. The proliferation of SIs means a significant portion of market liquidity, particularly for certain asset classes like corporate bonds and large-cap equities, now resides within these entities. A failure to formally integrate them into your [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a failure to access the complete market.

It leaves your firm exposed to suboptimal [execution outcomes](https://prime.greeks.live/question/how-do-different-dark-pool-priority-rules-affect-execution-outcomes-for-large-orders/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and creates a critical gap in your compliance framework. The objective is to construct a policy that acts as the blueprint for a sophisticated execution system ▴ one that can navigate a hybrid market structure, leveraging both anonymous order books and disclosed, principal-based quotes to achieve a superior result.

![Modular institutional-grade execution system components reveal luminous green data pathways, symbolizing high-fidelity cross-asset connectivity. This depicts intricate market microstructure facilitating RFQ protocol integration for atomic settlement of digital asset derivatives within a Principal's operational framework, underpinned by a Prime RFQ intelligence layer](https://options.greeks.live/wp-content/uploads/2025/07/modular-high-fidelity-execution-architecture-for-institutional-digital-asset-derivatives-rfq-protocol-integration-and-principals-operational-framework-optimization.jpg)

![A sophisticated, illuminated device representing an Institutional Grade Prime RFQ for Digital Asset Derivatives. Its glowing interface indicates active RFQ protocol execution, displaying high-fidelity execution status and price discovery for block trades](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-for-digital-asset-derivatives-best-execution-1.jpg)

## Strategy

Developing a strategy to incorporate Systematic Internalisers requires a multi-faceted approach that redefines [venue selection](https://prime.greeks.live/area/venue-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), integrates new data sources, and establishes clear protocols for interaction. The goal is to create a resilient and adaptive execution framework that can dynamically source liquidity from the most appropriate venue ▴ be it a [lit market](https://prime.greeks.live/area/lit-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) or an SI ▴ based on the specific characteristics of each order. This is an exercise in system design, moving beyond a simple checklist to a coherent operational logic.

![A sleek, multi-faceted plane represents a Principal's operational framework and Execution Management System. A central glossy black sphere signifies a block trade digital asset derivative, executed with atomic settlement via an RFQ protocol's private quotation](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-principal-os-high-fidelity-execution.jpg)

## Redefining the Venue Selection Framework

The traditional approach to venue selection, often a static list of preferred exchanges and MTFs, is inadequate for the SI regime. A strategic evolution involves creating a dynamic and evidence-based process for identifying, onboarding, and continuously evaluating SIs as formal execution venues. This process must be codified within the [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) policy itself.

The first step is a rigorous [due diligence](https://prime.greeks.live/area/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and onboarding protocol. This involves assessing a potential SI across several vectors:

- **Asset Class Coverage** ▴ A detailed mapping of the SI’s areas of specialization. An SI may offer deep liquidity in specific sectors of corporate bonds or certain equity indices, information that must be captured and made available to the trading desk.

- **Quoting Obligations** ▴ Understanding the nature of the SI’s quoting obligations under [MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The [policy should](https://prime.greeks.live/question/how-should-a-firms-execution-policy-adapt-for-different-asset-classes-under-mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) distinguish between SIs that are obligated to provide quotes and those that do so on a more discretionary basis.

- **Technology and Connectivity** ▴ An evaluation of the SI’s technological infrastructure, including its support for FIX protocols, the latency of its quote responses, and its integration capabilities with your firm’s [Execution Management System](https://prime.greeks.live/area/execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (EMS).

- **[Counterparty Risk](https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Profile** ▴ A thorough assessment of the SI’s financial stability and creditworthiness. As a principal counterparty, the SI introduces a level of risk that is absent when trading on a centrally cleared exchange.

This due diligence forms the basis for an approved list of SI counterparties. The policy must then articulate the criteria for an SI to be included on this list and the periodic review process required to ensure it remains a viable source of liquidity. The following table provides a comparative analysis of different execution venue types, highlighting the unique characteristics of SIs that necessitate this strategic shift.

### Table 1 ▴ Comparative Analysis of Execution Venue Architectures

| Characteristic | Regulated Market (RM) | Multilateral Trading Facility (MTF) | Systematic Internaliser (SI) |
| --- | --- | --- | --- |
| Price Formation | Central Limit Order Book (CLOB) | Central Limit Order Book (CLOB) or Quote-Driven | Principal Quote-Driven (Bilateral) |
| Interaction Model | Anonymous, All-to-All | Anonymous or Disclosed, All-to-All | Disclosed, One-to-One (via RFQ) |
| Liquidity Source | Member Order Flow | Member Order Flow | Firm’s Proprietary Capital |
| Counterparty | Central Counterparty (CCP) | Bilateral or CCP | The SI Firm Itself |
| Transparency | Full Pre-Trade and Post-Trade | Full Pre-Trade and Post-Trade | Pre-Trade on Request; Firm Post-Trade |
| Reporting Obligation | Venue Reports | Venue Reports | SI Reports the Trade |

![A complex, faceted geometric object, symbolizing a Principal's operational framework for institutional digital asset derivatives. Its translucent blue sections represent aggregated liquidity pools and RFQ protocol pathways, enabling high-fidelity execution and price discovery](https://options.greeks.live/wp-content/uploads/2025/08/principals-prime-os-digital-asset-derivatives-rfq-execution.jpg)

## What Is the Optimal Strategy for RFQ Management?

The primary mechanism for interacting with SIs is the [Request for Quote](https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (RFQ) protocol. A robust best execution policy must define the strategy for using RFQs to ensure that they enhance, rather than hinder, execution quality. An undisciplined approach to RFQs can lead to significant [information leakage](https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), signaling the market and resulting in adverse price movements.

The policy should therefore outline a “Smart RFQ” strategy, governed by the firm’s EMS/OMS. This strategy involves creating rules-based logic for when and how to solicit quotes from SIs. Key strategic considerations include:

- **Selective Solicitation** ▴ The system should not send an RFQ to every available SI for every order. The policy must define the logic for selecting a subset of SIs based on the instrument’s characteristics, the order’s size, and historical performance data of the SIs for that specific asset class.

- **Simultaneous vs. Sequential Quoting** ▴ The strategy must determine whether to send RFQs to multiple SIs at once or in a sequential, tiered manner. A simultaneous approach can increase competition but also heightens information leakage risk. A sequential approach mitigates leakage but may be slower. The policy should provide guidance on which approach is suitable under different market conditions and for different order types.

- **Integration with Lit Market Checks** ▴ A critical component of the strategy is the simultaneous check against lit market liquidity. Before an RFQ is sent or upon receipt of a quote, the system must compare the potential execution price with the prevailing prices on RMs and MTFs (e.g. the European Best Bid and Offer, or EBBO). The policy must mandate that an execution with an SI can only occur if the price is at or better than what is available on lit venues, after accounting for all costs.

> A sophisticated best execution strategy treats the RFQ not as a simple message, but as a surgical tool for discovering principal liquidity while minimizing market impact.

![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)

## How Should a Firm Balance Qualitative and Quantitative Factors?

MiFID II requires firms to consider a range of execution factors beyond just price and cost, including speed, likelihood of execution, and any other relevant consideration. When dealing with SIs, the qualitative factors take on heightened importance. The strategy must create a formal framework for balancing the quantitative (price) with the qualitative.

The policy should mandate the creation of a scorecard for each SI, updated on at least a quarterly basis. This scorecard serves as a key input into the venue selection and RFQ routing logic. It provides a structured way to evaluate SIs and demonstrate a robust monitoring process to regulators.

### Table 2 ▴ Systematic Internaliser Qualitative Scorecard

| Evaluation Category | Key Performance Indicator (KPI) | Measurement Method | Weighting |
| --- | --- | --- | --- |
| Quote Quality | Price Improvement vs. EBBO | TCA Analysis (in basis points) | 35% |
| Reliability | Quote Response Rate | (Quotes Responded / Quotes Sent) % | 25% |
| Speed | Average Quote Response Time | FIX message timestamp analysis (in ms) | 15% |
| Information Leakage | Post-RFQ Price Impact | TCA analysis of market drift post-quote | 15% |
| Settlement Efficiency | Settlement Fail Rate | Operations department data | 10% |

By codifying this scorecard approach within the best execution policy, the firm creates a data-driven feedback loop. It transforms the abstract requirement to consider qualitative factors into a concrete, measurable, and defensible process. This strategy ensures that the firm’s relationships with SIs are managed with the same rigor as its interactions with traditional exchanges, fulfilling the core mandate of MiFID II to take “all sufficient steps” for the benefit of the client.

![A central Prime RFQ core powers institutional digital asset derivatives. Translucent conduits signify high-fidelity execution and smart order routing for RFQ block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-liquidity-aggregation-engine.jpg)

![A dynamic visual representation of an institutional trading system, featuring a central liquidity aggregation engine emitting a controlled order flow through dedicated market infrastructure. This illustrates high-fidelity execution of digital asset derivatives, optimizing price discovery within a private quotation environment for block trades, ensuring capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principal-os-driving-high-fidelity-execution-for-digital-asset-derivatives-through-optimized-rfq-protocols-and-smart-order-routing.jpg)

## Execution

The execution phase translates the conceptual framework and strategic decisions into a tangible, operational reality within the firm. This involves amending core governance documents, re-calibrating analytical models, upgrading technological systems, and establishing a rigorous monitoring regime. This is the engineering layer where the policy becomes a living, breathing part of the firm’s trading apparatus.

![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)

## The Operational Playbook for Policy Amendment

Amending the best execution policy is a formal project that requires careful planning and execution. It is a procedural endeavor that must be documented meticulously to create a clear audit trail. The following steps provide a robust playbook for this process:

- **Establish a Cross-Functional [Working Group](https://prime.greeks.live/question/what-is-a-one-on-one-communication-group-for-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)** ▴ The project should be led by a working group comprising representatives from Trading, Compliance, Technology, and Operations. This ensures that all facets of the integration are considered from the outset.

- **Conduct a Gap Analysis** ▴ The working group must perform a detailed analysis of the existing best execution policy, identifying all sections that require modification. This includes the definition of execution venues, the description of execution factors, the [venue selection process](https://prime.greeks.live/question/how-does-an-rfq-platform-differentiate-between-on-venue-and-off-venue-reporting-obligations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and the disclosures to clients.

- **Draft SI-Specific Language** ▴ New sections must be drafted to specifically address Systematic Internalisers. This language should define what an SI is, explain the RFQ [interaction model](https://prime.greeks.live/question/what-are-the-primary-differences-in-participant-interaction-between-an-rfq-and-a-central-limit-order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and explicitly state that SIs are considered a distinct type of execution venue. It must detail how the firm will ensure that execution with an SI meets the best execution standard, referencing checks against lit markets.

- **Define The SI Governance Process** ▴ The policy must codify the process for the approval, review, and removal of SIs from the firm’s list of eligible counterparties. This section should reference the due diligence process and the quantitative/qualitative scorecards used for ongoing evaluation.

- **Update System Documentation** ▴ The technological implications must be documented. This includes updating the specifications for the firm’s EMS or SOR to reflect the new RFQ logic, the rules for selecting SIs, and the data capture requirements for TCA and monitoring.

- **Secure Governance Approval** ▴ The amended policy must be presented to the firm’s Best Execution Committee or equivalent governance body for review and formal approval. The minutes of this meeting should reflect a thorough discussion of the changes and the rationale behind them.

- **Client Communication and Consent** ▴ The updated policy must be communicated to all clients. Depending on the client agreement, explicit consent may be required for the firm to execute orders on this type of venue. This step is critical for regulatory compliance.

- **Trader Training** ▴ All members of the trading desk must be trained on the updated policy, with a particular focus on the practical application of the RFQ strategy and the tools available to them within the EMS to make informed execution decisions.

![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)

## Quantitative Modeling and Data Analysis

The credibility of an SI-inclusive best execution policy rests on the firm’s ability to quantitatively measure and compare execution quality. Standard [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) must be extended to capture the nuances of RFQ-based trading. The focus shifts from simple price benchmarks to a more holistic analysis of the entire interaction.

The core analytical challenge is to create a fair comparison between a bilateral quote from an SI and the liquidity available on a multilateral [order book](https://prime.greeks.live/area/order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). This requires capturing a snapshot of the market at the precise moment of the RFQ and execution. The firm’s data infrastructure must be capable of recording not just the trade itself, but the context in which it occurred, including the state of the lit market order book (EBBO) and the quotes received from all solicited SIs.

> Effective execution relies on a TCA framework that can precisely measure price improvement and information leakage from RFQ-based interactions.

The following table presents a hypothetical TCA report for a series of trades in a corporate bond, comparing executions across an MTF and two different SIs. This type of analysis is essential for the Best Execution Committee’s quarterly review process.

### Table 3 ▴ Sample Transaction Cost Analysis Report

| Order ID | Instrument | Venue | Size (M) | Arrival Price (Mid) | Exec Price | Price Imp. (bps) | Post-Trade Impact (bps) |
| --- | --- | --- | --- | --- | --- | --- | --- |
| A-001 | VOD 4.25% 2028 | MTF-X | 2.0 | 101.50 | 101.52 | -2.0 | +1.5 |
| A-002 | VOD 4.25% 2028 | SI-Alpha | 2.0 | 101.48 | 101.48 | 0.0 | -0.5 |
| B-001 | BT 5.75% 2029 | SI-Beta | 5.0 | 103.10 | 103.09 | +1.0 | -1.0 |
| B-002 | BT 5.75% 2029 | SI-Alpha | 5.0 | 103.11 | 103.12 | -1.0 | +2.5 |
| C-001 | GSK 3.50% 2027 | SI-Beta | 1.5 | 99.80 | 99.805 | -0.5 | 0.0 |
| C-002 | GSK 3.50% 2027 | MTF-X | 1.5 | 99.82 | 99.83 | -1.0 | +0.5 |

In this analysis, ‘[Price Improvement](https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)’ is calculated against the arrival mid-price; a positive value indicates a better-than-mid execution. ‘Post-Trade Impact’ measures the market movement in the minutes following the trade; a large positive impact after a buy order could signal information leakage. In order B-001, SI-Beta provided 1 basis point of price improvement with minimal market impact.

In contrast, order B-002 with SI-Alpha resulted in a worse price and significant adverse market movement, suggesting the RFQ may have signaled the firm’s intent. This data allows the firm to move beyond anecdotal evidence and make quantitative judgments about SI performance.

![This visual represents an advanced Principal's operational framework for institutional digital asset derivatives. A foundational liquidity pool seamlessly integrates dark pool capabilities for block trades](https://options.greeks.live/wp-content/uploads/2025/07/principal-crypto-derivatives-os-rfq-execution-microstructure.jpg)

## System Integration and Technological Architecture

The policy’s execution hinges on the firm’s technological capabilities. The EMS/OMS is the central nervous system of the trading process, and it must be architected to support a sophisticated SI interaction model. Key technological requirements include:

- **Advanced RFQ Workflow Management** ▴ The system must provide traders with a flexible interface to manage RFQ workflows. This includes the ability to create custom SI lists for different asset classes, configure timers for quote responses, and view incoming quotes in a consolidated ladder alongside lit market depth.

- **[FIX Protocol](https://prime.greeks.live/area/fix-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Support** ▴ Robust support for the Financial Information eXchange (FIX) protocol is non-negotiable. The system must handle the specific message types for RFQs (e.g. QuoteRequest (R), QuoteResponse (S), QuoteStatusReport (AI)) flawlessly, ensuring accurate and timely communication with SIs.

- **Data Capture and Timestamping** ▴ To power the TCA models, the system must capture and timestamp all relevant events with high precision. This includes the moment an order is received, the time each RFQ is sent, the time each quote is received, and the final execution time. All captured data must be stored in a structured format that is easily accessible to the TCA system.

- **Rules-Based Routing Logic** ▴ The core of the system is a rules engine that automates the venue selection process according to the best execution policy. This engine should incorporate the SI scorecards, order characteristics (size, liquidity), and real-time market conditions to determine the optimal routing decision ▴ whether to go to the lit market, send an RFQ, or use a hybrid approach.

By investing in this technological architecture, the firm transforms its best execution policy from a static compliance document into a dynamic, intelligent system that actively works to optimize execution outcomes for clients across a complex and fragmented market landscape.

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

## References

- International Capital Market Association. “MiFID II implementation ▴ the Systematic Internaliser regime.” ICMA, 6 Apr. 2017.

- Janus Henderson Investors. “Best Execution Policy.” Janus Henderson, 2023.

- “Best Execution Under MiFID II.” Datasite, 2018.

- International Capital Market Association. “MiFID II Best Execution requirements for repo and SFTs ▴ The challenges and (im)practicalities.” ICMA, Jan. 2017.

- AFME. “Guide for drafting/review of Execution Policy under MiFID II.” Association for Financial Markets in Europe, 2018.

![A dark, reflective surface displays a luminous green line, symbolizing a high-fidelity RFQ protocol channel within a Crypto Derivatives OS. This signifies precise price discovery for digital asset derivatives, ensuring atomic settlement and optimizing portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-pathway-optimizing-principal-liquidity-and-capital-efficiency.jpg)

## Reflection

![A reflective surface supports a sharp metallic element, stabilized by a sphere, alongside translucent teal prisms. This abstractly represents institutional-grade digital asset derivatives RFQ protocol price discovery within a Prime RFQ, emphasizing high-fidelity execution and liquidity pool optimization](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-prime-os-microstructure-optimization.jpg)

## Is Your Execution Architecture Fit for Purpose?

The integration of Systematic Internalisers into your best execution framework is more than a regulatory update; it is a diagnostic test of your firm’s entire operational architecture. It forces a critical examination of your technology, your data analysis capabilities, and your governance structures. The process reveals whether your firm is structured to passively react to market structure changes or to actively engineer a strategic advantage from them.

Consider the data flowing from these new interactions. Each quote, each execution, each latency measurement is a piece of intelligence. Is this data being treated as a compliance byproduct, or is it being fed into a learning system that constantly refines your understanding of liquidity and sharpens your execution logic? A truly evolved policy is one that not only permits access to SIs but also mandates the creation of an intelligence layer that learns from every interaction.

Ultimately, the question is not whether to include SIs in your policy, but how you will leverage that inclusion to build a superior execution capability. The knowledge gained through this process is a component in a much larger system of institutional intelligence. The real strategic potential lies in transforming your firm from a mere participant in the market to a conscious architect of its own execution outcomes.

![A sharp, dark, precision-engineered element, indicative of a targeted RFQ protocol for institutional digital asset derivatives, traverses a secure liquidity aggregation conduit. This interaction occurs within a robust market microstructure platform, symbolizing high-fidelity execution and atomic settlement under a Principal's operational framework for best execution](https://options.greeks.live/wp-content/uploads/2025/07/principal-grade-digital-asset-derivatives-rfq-protocol-execution-engine.jpg)

## Glossary

<a href="https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precise metallic and transparent teal mechanism symbolizes the intricate market microstructure of a Prime RFQ. It facilitates high-fidelity execution for institutional digital asset derivatives, optimizing RFQ protocols for private quotation, aggregated inquiry, and block trade management, ensuring best execution](https://options.greeks.live/wp-content/uploads/2025/07/advanced-principal-trading-systems-driving-high-fidelity-institutional-digital-asset-derivatives-rfq-execution-protocols.jpg)

## Systematic Internalisers

Meaning ▴ A market participant, typically a broker-dealer, systematically executing client orders against its own inventory or other client orders off-exchange, acting as principal. </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 sleek, metallic instrument with a central pivot and pointed arm, featuring a reflective surface and a teal band, embodies an institutional RFQ protocol. This represents high-fidelity execution for digital asset derivatives, enabling private quotation and optimal price discovery for multi-leg spread strategies within a dark pool, powered by a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-for-optimal-liquidity-discovery.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/central-limit-order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek blue and white mechanism with a focused lens symbolizes Pre-Trade Analytics for Digital Asset Derivatives. A glowing turquoise sphere represents a Block Trade within a Liquidity Pool, demonstrating High-Fidelity Execution via RFQ protocol for Price Discovery in Dark Pool Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/advanced-institutional-digital-asset-derivatives-rfq-execution-system-for-optimal-price-discovery-and-high-fidelity-execution.jpg)

## Central Limit Order Book

Meaning ▴ A Central Limit Order Book is a digital repository that aggregates all outstanding buy and sell orders for a specific financial instrument, organized by price level and time of entry. </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">
![A luminous digital market microstructure diagram depicts intersecting high-fidelity execution paths over a transparent liquidity pool. A central RFQ engine processes aggregated inquiries for institutional digital asset derivatives, optimizing price discovery and capital efficiency within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-principal-operational-framework-price-discovery.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/execution-venue/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A fractured, polished disc with a central, sharp conical element symbolizes fragmented digital asset liquidity. This Principal RFQ engine ensures high-fidelity execution, precise price discovery, and atomic settlement within complex market microstructure, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-unifying-fragmented-digital-asset-derivatives-liquidity-for-best-execution.jpg)

## Execution Venue

Meaning ▴ An Execution Venue refers to a regulated facility or system where financial instruments are traded, encompassing entities such as regulated markets, multilateral trading facilities (MTFs), organized trading facilities (OTFs), and systematic internalizers. </a><a href="https://prime.greeks.live/area/all-sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## All Sufficient Steps

Meaning ▴ All Sufficient Steps denotes a design principle and operational mandate within a system where every component or process is engineered to autonomously achieve its defined objective without requiring external intervention or additional inputs beyond its initial parameters. </a><a href="https://prime.greeks.live/question/what-are-the-operational-consequences-of-misreporting-under-mifid-ii-versus-a-reporting-failure-under-emir/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An abstract, precisely engineered construct of interlocking grey and cream panels, featuring a teal display and control. This represents an institutional-grade Crypto Derivatives OS for RFQ protocols, enabling high-fidelity execution, liquidity aggregation, and market microstructure optimization within a Principal's operational framework for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/integrated-principal-trading-system-modules-for-institutional-digital-asset-derivatives-rfq-execution-and-optimized-market-microstructure.jpg)

## Under Mifid

A MiFID II misreport corrupts market surveillance data; an EMIR failure hides systemic risk, creating distinct operational and reputational threats. </a><a href="https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, dark blue domed component, symbolizing a private quotation interface, rests on a gleaming silver ring. This represents a robust Prime RFQ framework, enabling high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/optimized-execution-for-institutional-digital-asset-derivatives-rfq.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/question/how-do-different-dark-pool-priority-rules-affect-execution-outcomes-for-large-orders/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A deconstructed mechanical system with segmented components, revealing intricate gears and polished shafts, symbolizing the transparent, modular architecture of an institutional digital asset derivatives trading platform. This illustrates multi-leg spread execution, RFQ protocols, and atomic settlement processes](https://options.greeks.live/wp-content/uploads/2025/07/deconstructed-principal-trading-system-revealing-core-mechanics-of-digital-asset-derivatives-execution.jpg)

## Execution Outcomes

Dark pool priority rules dictate execution certainty; size priority gives large orders precedence, minimizing signal risk and improving fill quality. </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">
![A central reflective sphere, representing a Principal's algorithmic trading core, rests within a luminous liquidity pool, intersected by a precise execution bar. This visualizes price discovery for digital asset derivatives via RFQ protocols, reflecting market microstructure optimization within an institutional grade Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-for-digital-asset-derivatives-best-execution.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/lit-market/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Modular plates and silver beams represent a Prime RFQ for digital asset derivatives. This principal's operational framework optimizes RFQ protocol for block trade high-fidelity execution, managing market microstructure and liquidity pools](https://options.greeks.live/wp-content/uploads/2025/08/digital-asset-derivatives-rfq-protocols-principal-execution-layer.jpg)

## Lit Market

Meaning ▴ A lit market is a trading venue providing mandatory pre-trade transparency. </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">
![A metallic disc intersected by a dark bar, over a teal circuit board. This visualizes Institutional Liquidity Pool access via RFQ Protocol, enabling Block Trade Execution of Digital Asset Options with High-Fidelity Execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-principal-operational-framework-market-microstructure-high-fidelity-execution.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/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A stylized abstract radial design depicts a central RFQ engine processing diverse digital asset derivatives flows. Distinct halves illustrate nuanced market microstructure, optimizing multi-leg spreads and high-fidelity execution, visualizing a Principal's Prime RFQ managing aggregated inquiry and latent liquidity](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-execution-engine-optimizing-digital-asset-derivatives-market-microstructure-for-institutional-liquidity-aggregation.jpg)

## Due Diligence

Meaning ▴ Due diligence refers to the systematic investigation and verification of facts pertaining to a target entity, asset, or counterparty before a financial commitment or strategic decision is executed. </a><a href="https://prime.greeks.live/question/how-should-a-firms-execution-policy-adapt-for-different-asset-classes-under-mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Policy Should

A firm's execution policy under MiFID II must be a dynamic, multi-faceted framework tailored to the unique microstructure of each asset class. </a><a href="https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated, 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](https://options.greeks.live/wp-content/uploads/2025/07/principals-high-fidelity-rfq-engine-for-digital-asset-derivatives-execution.jpg)

## Mifid Ii

Meaning ▴ MiFID II, the Markets in Financial Instruments Directive II, constitutes a comprehensive regulatory framework enacted by the European Union to govern financial markets, investment firms, and trading venues. </a><a href="https://prime.greeks.live/area/execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered system components in beige, teal, and metallic converge at a vibrant blue interface. This symbolizes a critical RFQ protocol junction within an institutional Prime RFQ, facilitating high-fidelity execution and atomic settlement for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-connectivity-layer-for-digital-asset-derivatives-execution.jpg)

## Execution Management System

Meaning ▴ An Execution Management System (EMS) is a specialized software application engineered to facilitate and optimize the electronic execution of financial trades across diverse venues and asset classes. </a><a href="https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A modular system with beige and mint green components connected by a central blue cross-shaped element, illustrating an institutional-grade RFQ execution engine. This sophisticated architecture facilitates high-fidelity execution, enabling efficient price discovery for multi-leg spreads and optimizing capital efficiency within a Prime RFQ framework for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/principal-prime-os-rfq-engine-for-digital-asset-derivatives.jpg)

## Counterparty Risk

Meaning ▴ Counterparty risk denotes the potential for financial loss stemming from a counterparty's failure to fulfill its contractual obligations in a transaction. </a><a href="https://prime.greeks.live/area/information-leakage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered interface for institutional digital asset derivatives. A circular system component, perhaps an Execution Management System EMS module, connects via a multi-faceted Request for Quote RFQ protocol bridge to a distinct teal capsule, symbolizing a bespoke block trade](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-interface-for-institutional-digital-asset-derivatives-request-for-quote-protocol-high-fidelity-execution-within-principal-operating-system.jpg)

## Information Leakage

Meaning ▴ Information leakage denotes the unintended or unauthorized disclosure of sensitive trading data, often concerning an institution's pending orders, strategic positions, or execution intentions, to external market participants. </a><a href="https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting concrete structures symbolize the robust Market Microstructure underpinning Institutional Grade Digital Asset Derivatives. Dynamic spheres represent Liquidity Pools and Implied Volatility](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-framework-optimizing-rfq-execution-and-liquidity-for-principal-trading.jpg)

## Request for Quote

Meaning ▴ A Request for Quote, or RFQ, constitutes a formal communication initiated by a potential buyer or seller to solicit price quotations for a specified financial instrument or block of instruments from one or more liquidity providers. </a><a href="https://prime.greeks.live/question/what-is-a-one-on-one-communication-group-for-rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interlocking transparent and opaque geometric planes on a dark surface. This abstract form visually articulates the intricate Market Microstructure of Institutional Digital Asset Derivatives, embodying High-Fidelity Execution through advanced RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/geometric-abstraction-of-institutional-digital-asset-derivatives-market-microstructure-driving-high-fidelity-execution-via-principal-rfq-protocols-and-optimal-liquidity-aggregation.jpg)

## Working Group

A one-on-one RFQ is a secure, bilateral communication protocol for executing sensitive trades with minimal market impact. </a><a href="https://prime.greeks.live/question/how-does-an-rfq-platform-differentiate-between-on-venue-and-off-venue-reporting-obligations/?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)

## Venue Selection Process

An RFQ platform differentiates reporting by codifying MiFIR's hierarchy, assigning on-venue reports to the venue and off-venue reports to the correct counterparty based on SI status. </a><a href="https://prime.greeks.live/question/what-are-the-primary-differences-in-participant-interaction-between-an-rfq-and-a-central-limit-order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central metallic RFQ engine anchors radiating segmented panels, symbolizing diverse liquidity pools and market segments. Varying shades denote distinct execution venues within the complex market microstructure, facilitating price discovery for institutional digital asset derivatives with minimal slippage and latency via high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/principals-digital-asset-derivatives-rfq-protocol-execution-nexus.jpg)

## Interaction Model

A CLOB is a transparent, all-to-all auction; an RFQ is a discreet, targeted negotiation for sourcing liquidity with minimal impact. </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">
![Intersecting digital architecture with glowing conduits symbolizes Principal's operational framework. An RFQ engine ensures high-fidelity execution of Institutional Digital Asset Derivatives, facilitating block trades, multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/principal-digital-asset-derivatives-rfq-engine-high-fidelity-execution.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA) is the quantitative methodology for assessing the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/order-book/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered institutional grade components, representing prime brokerage infrastructure, intersect via a translucent teal bar embodying a high-fidelity execution RFQ protocol. This depicts seamless liquidity aggregation and atomic settlement for digital asset derivatives, reflecting complex market microstructure and efficient price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-prime-os-core.jpg)

## Order Book

Meaning ▴ An Order Book is a real-time electronic ledger detailing all outstanding buy and sell orders for a specific financial instrument, organized by price level and sorted by time priority within each level. </a><a href="https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A chrome cross-shaped central processing unit rests on a textured surface, symbolizing a Principal's institutional grade execution engine. It integrates multi-leg options strategies and RFQ protocols, leveraging real-time order book dynamics for optimal price discovery in digital asset derivatives, minimizing slippage and maximizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principals-high-fidelity-rfq-execution-digital-asset-derivatives-hub.jpg)

## Price Improvement

Meaning ▴ Price improvement denotes the execution of a trade at a more advantageous price than the prevailing National Best Bid and Offer (NBBO) at the moment of order submission. </a><a href="https://prime.greeks.live/area/fix-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Symmetrical, institutional-grade Prime RFQ component for digital asset derivatives. Metallic segments signify interconnected liquidity pools and precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/principals-prime-os-for-digital-asset-derivatives-rfq-execution.jpg)

## Fix Protocol

Meaning ▴ The Financial Information eXchange (FIX) Protocol is a global messaging standard developed specifically for the electronic communication of securities transactions and related data. </a>

**Tags:** [Counterparty Risk](https://options.greeks.live/area/counterparty-risk/), [International Capital Market Association](https://options.greeks.live/area/international-capital-market-association/), [Limit Order Book](https://options.greeks.live/area/limit-order-book/), [FIX Protocol](https://options.greeks.live/area/fix-protocol/), [Central Limit Order Book](https://options.greeks.live/area/central-limit-order-book/), [Smart Order Router](https://options.greeks.live/area/smart-order-router/)	

## Discover More

- 
### [How Do Modern Execution Management Systems Integrate Both CLOB and RFQ Protocols?](https://options.greeks.live/question/how-do-modern-execution-management-systems-integrate-both-clob-and-rfq-protocols/)
![A sleek, futuristic institutional-grade instrument, representing high-fidelity execution of digital asset derivatives. Its sharp point signifies price discovery via RFQ protocols. The central Execution Management System EMS orchestrates multi-leg spread strategies, leveraging deep liquidity pools for block trade processing.](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-execution-engine-for-institutional-digital-asset-derivatives.jpg)

Modern EMS platforms integrate CLOB and RFQ protocols to provide a unified system for sourcing both anonymous and discreet liquidity, optimizing execution by managing market impact.

- 
### [How Does the Role of a Systematic Internaliser Affect a Firm’s Best Execution Strategy?](https://options.greeks.live/question/how-does-the-role-of-a-systematic-internaliser-affect-a-firms-best-execution-strategy/)
![An abstract, precisely engineered construct of interlocking grey and cream panels, featuring a teal display and control. This represents an institutional-grade Crypto Derivatives OS for RFQ protocols, enabling high-fidelity execution, liquidity aggregation, and market microstructure optimization within a Principal's operational framework for digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/08/integrated-principal-trading-system-modules-for-institutional-digital-asset-derivatives-rfq-execution-and-optimized-market-microstructure.jpg)

A Systematic Internaliser reshapes best execution by offering a principal-based liquidity source that can reduce market impact and costs.

- 
### [How Does the Rise of Systematic Internalisers Change the Strategic Considerations for Best Execution in Europe?](https://options.greeks.live/question/how-does-the-rise-of-systematic-internalisers-change-the-strategic-considerations-for-best-execution-in-europe/)
![A central Prime RFQ core powers institutional digital asset derivatives. Translucent conduits signify high-fidelity execution and smart order routing for RFQ block trades. Peripheral modules symbolize aggregated liquidity pools, enabling precise price discovery, mitigating counterparty risk, and optimizing portfolio margin.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-liquidity-aggregation-engine.jpg)

The rise of Systematic Internalisers reframes European best execution from a public market quest to a sophisticated process of sourcing private, principal liquidity with demonstrable price improvement.

- 
### [How Does MiFID II Differentiate Best Execution for RFQ and CLOB Systems?](https://options.greeks.live/question/how-does-mifid-ii-differentiate-best-execution-for-rfq-and-clob-systems/)
![Two smooth, teal spheres, representing institutional liquidity pools, precisely balance a metallic object, symbolizing a block trade executed via RFQ protocol. This depicts high-fidelity execution, optimizing price discovery and capital efficiency within a Principal's operational framework for digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-bridging-institutional-liquidity-pools-via-rfq-protocol-for-optimized-digital-asset-derivatives-price-discovery.jpg)

MiFID II mandates a bifurcated best execution analysis, assessing CLOBs on post-trade data against public benchmarks and RFQs on the integrity of the private price discovery process.

- 
### [How Does RFQ Provide a High-Fidelity Execution?](https://options.greeks.live/question/how-does-rfq-provide-a-high-fidelity-execution/)
![A robust, dark metallic platform, indicative of an institutional-grade execution management system. Its precise, machined components suggest high-fidelity execution for digital asset derivatives via RFQ protocols. The textured surface implies granular market microstructure data, supporting price discovery and atomic settlement for block trades within a prime brokerage framework.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-platform-high-fidelity-price-discovery-and-atomic-settlement-infrastructure.jpg)

RFQ provides high-fidelity execution by replacing public market impact with a private, competitive, and controlled price discovery process.

- 
### [What Are the Regulatory Implications of Best Execution When Choosing between an RFQ and a CLOB?](https://options.greeks.live/question/what-are-the-regulatory-implications-of-best-execution-when-choosing-between-an-rfq-and-a-clob/)
![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. Distinct segments highlight integrated liquidity pools, atomic settlement, and optimized market microstructure for efficient multi-leg spread trading.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-digital-asset-derivatives-execution-engine.jpg)

The regulatory duty of best execution requires a firm to systematically justify its choice between a discreet RFQ and a transparent CLOB.

- 
### [How Does the SI Regime Impact the Measurement of Best Execution for Buy-Side Firms?](https://options.greeks.live/question/how-does-the-si-regime-impact-the-measurement-of-best-execution-for-buy-side-firms/)
![A segmented, teal-hued system component with a dark blue inset, symbolizing an RFQ engine within a Prime RFQ, emerges from darkness. Illuminated by an optimized data flow, its textured surface represents market microstructure intricacies, facilitating high-fidelity execution for institutional digital asset derivatives via private quotation for multi-leg spreads.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-intelligence-layer-for-institutional-digital-asset-derivatives-rfq.jpg)

The SI regime redefines best execution by transforming it into a data-intensive analysis of private quotes against public market data.

- 
### [How Did Mifid Ii Influence the Adoption of the Rfq Protocol in European Equity Markets?](https://options.greeks.live/question/how-did-mifid-ii-influence-the-adoption-of-the-rfq-protocol-in-european-equity-markets/)
![A central metallic RFQ engine anchors radiating segmented panels, symbolizing diverse liquidity pools and market segments. Varying shades denote distinct execution venues within the complex market microstructure, facilitating price discovery for institutional digital asset derivatives with minimal slippage and latency via high-fidelity execution.](https://options.greeks.live/wp-content/uploads/2025/07/principals-digital-asset-derivatives-rfq-protocol-execution-nexus.jpg)

MiFID II catalyzed RFQ adoption by constraining dark pools and formalizing SIs, making RFQ the prime protocol for compliant block liquidity.

- 
### [Can a Single Block Order Be Partially Filled on a Regulated Market and an Si Simultaneously?](https://options.greeks.live/question/can-a-single-block-order-be-partially-filled-on-a-regulated-market-and-an-si-simultaneously/)
![A cutaway reveals the intricate market microstructure of an institutional-grade platform. Internal components signify algorithmic trading logic, supporting high-fidelity execution via a streamlined RFQ protocol for aggregated inquiry and price discovery within a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-execution-for-digital-asset-derivatives-via-rfq-protocols.jpg)

A single block order can be partially filled across a regulated market and an SI via a smart order router to optimize execution by sourcing diverse liquidity.

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---

**Original URL:** https://options.greeks.live/question/how-should-a-buy-side-firms-best-execution-policy-evolve-to-incorporate-systematic-internalisers/
