# What Are the Core Differences between FINRA and SEC Rules on RFQ for Best Execution? ▴ Question

**Published:** 2025-08-03
**Categories:** Question

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![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)

![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)

## Concept

An examination of the regulatory architecture governing best execution reveals a layered system of oversight, with both the [Securities and Exchange Commission](https://prime.greeks.live/area/securities-and-exchange-commission/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SEC) and the [Financial Industry Regulatory Authority](https://prime.greeks.live/question/what-role-does-a-resolution-authority-play-in-the-valuation-of-derivatives-during-a-bank-failure/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (FINRA) establishing distinct, yet interconnected, frameworks. Your operational imperative is to navigate these frameworks with precision. The core distinction lies in their origin and design philosophy.

FINRA’s Rule 5310 represents a principles-based standard developed by a self-regulatory organization (SRO), providing member firms with a set of factors for exercising [reasonable diligence](https://prime.greeks.live/question/how-do-regulators-evaluate-the-reasonable-diligence-used-in-choosing-an-execution-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The SEC’s proposed [Regulation Best Execution](https://prime.greeks.live/area/regulation-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) introduces a federal, top-down, and highly prescriptive mandate that codifies and expands upon existing duties, compelling a more rigorous and uniform approach to compliance, documentation, and conflict management.

Understanding this distinction is fundamental to designing a compliant and efficient [execution management system](https://prime.greeks.live/question/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). FINRA’s regime allows for a degree of interpretive flexibility, contingent on a firm demonstrating its diligence through a holistic analysis of market factors. The SEC’s architecture, conversely, seeks to standardize the core components of this diligence, mandating specific procedural checks, particularly where conflicts of interest are present. For a trading desk, this means the internal logic of order routing and [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) analysis must be architected to satisfy both the broader principles of FINRA and the specific, granular requirements of the SEC.

The request-for-quote (RFQ) protocol, a mechanism for sourcing liquidity bilaterally, operates directly within this dual regulatory field. Its function as a tool for price discovery in less liquid markets requires a robust [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) methodology that can be documented and defended under both sets of rules.

> A firm’s best execution protocol must be engineered to satisfy the principles-based diligence of FINRA while adhering to the prescriptive procedural mandates of the SEC.

The operational challenge is one of integration. A firm’s [policies and procedures](https://prime.greeks.live/area/policies-and-procedures/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) must form a coherent system that proves best execution is not merely an outcome but an embedded process. This process begins with the identification of reasonably available markets and extends through the routing decision, execution, and post-trade analysis. The SEC’s proposal elevates the importance of the review process, demanding quarterly assessments of execution quality against potential alternatives.

This transforms the post-trade function from a historical record-keeping task into a dynamic feedback loop that must inform and recalibrate the firm’s routing logic. For RFQs, this implies that the selection of counterparties and the evaluation of their responses must be systematically recorded and benchmarked to demonstrate that the protocol consistently yields prices as favorable as possible under prevailing market conditions.

Ultimately, the dual frameworks compel a systems-thinking approach. A firm cannot view its FINRA and SEC obligations as separate checklists. Instead, it must build a unified [compliance architecture](https://prime.greeks.live/area/compliance-architecture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) where the principles of one rule are fulfilled through the detailed procedures demanded by the other. The integrity of this system is what protects the firm and its clients, ensuring that every order, whether routed to a lit exchange or priced through a bilateral RFQ, is handled within a defensible and transparent best execution framework.

![A textured, dark sphere precisely splits, revealing an intricate internal RFQ protocol engine. A vibrant green component, indicative of algorithmic execution and smart order routing, interfaces with a lighter counterparty liquidity element](https://options.greeks.live/wp-content/uploads/2025/07/principal-grade-digital-asset-derivatives-rfq-execution-engine-microstructure.jpg)

![Precisely engineered circular beige, grey, and blue modules stack tilted on a dark base. A central aperture signifies the core RFQ protocol engine](https://options.greeks.live/wp-content/uploads/2025/07/core-prime-os-rfq-engine-digital-asset-derivatives-trading-system-execution.jpg)

## Strategy

Developing a strategic response to the dual regulatory structure for best execution requires moving beyond mere compliance and architecting a system that creates a sustainable operational advantage. The strategic objective is to design and implement a unified best execution framework that is both robust enough to meet the prescriptive demands of the SEC’s proposed Regulation Best Execution and flexible enough to apply the principles-based diligence of [FINRA Rule 5310](https://prime.greeks.live/area/finra-rule-5310/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) across diverse asset classes and execution protocols, including the RFQ mechanism.

![A precision-engineered central mechanism, with a white rounded component at the nexus of two dark blue interlocking arms, visually represents a robust RFQ Protocol. This system facilitates Aggregated Inquiry and High-Fidelity Execution for Institutional Digital Asset Derivatives, ensuring Optimal Price Discovery and efficient Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/centralized-hub-for-institutional-digital-asset-derivatives-rfq-protocol-aggregated-inquiry-and-optimal-price-discovery.jpg)

## Architecting a Unified Compliance Framework

The core strategic decision is to build a single, cohesive set of policies and procedures rather than maintaining separate, siloed approaches for each regulatory body. This unified framework acts as the central operating system for all execution-related decisions. Its design must be predicated on the most stringent requirements of both rule sets. Where FINRA provides principles, the SEC provides prescription; the unified strategy adopts the prescription as the methodology for satisfying the principle.

For instance, FINRA Rule 5310 requires “reasonable diligence” in ascertaining the best market. The SEC’s proposed Rule 1101 details specific requirements for regular [execution quality reviews](https://prime.greeks.live/question/how-does-the-luld-plan-impact-erroneous-trade-reviews-during-core-trading/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), at least quarterly, and heightened obligations for [conflicted transactions](https://prime.greeks.live/area/conflicted-transactions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). A strategic implementation uses the SEC’s quarterly review mandate as the primary mechanism to demonstrate FINRA’s required diligence. The output of this quarterly review, which compares execution quality against other markets, becomes the evidentiary backbone of the firm’s compliance with both regulations.

![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)

## How Do the Core Provisions Compare?

A granular analysis of the two rule sets reveals critical divergences that must be addressed at a strategic level. The following table delineates these differences, providing the raw data needed to inform the architecture of a firm’s compliance system.

| Provision Category | FINRA Rule 5310 (Principles-Based) | SEC Proposed Regulation Best Execution (Prescriptive) |
| --- | --- | --- |
| Core Standard | Requires firms to use “reasonable diligence” to ascertain the best market for a security and buy or sell in that market so the resulting price is as favorable as possible under prevailing conditions. | Codifies a federal standard requiring firms to use “reasonable diligence” to ascertain the best market, using identical phrasing but adding layers of specific procedural requirements. |
| Policies and Procedures | Requires firms to have procedures for conducting “regular and rigorous” reviews of execution quality. The definition of “regular and rigorous” is left to the firm’s reasonable judgment. | Mandates written policies and procedures that are detailed and comprehensive. Requires a review of these policies at least annually and an assessment of execution quality at least quarterly. |
| Conflicted Transactions | Addresses conflicts generally, stating that payment for order flow (PFOF) arrangements must not interfere with best execution duties. Guidance is provided through regulatory notices. | Explicitly defines and requires heightened diligence for “conflicted transactions,” including PFOF, principal trades, and routing to affiliates, especially for retail customers. |
| Scope and Applicability | Applies to all FINRA member firms for transactions in equities, options, and debt securities. Provides specific considerations for debt markets, such as the accessibility of quotations. | Applies broadly to all broker-dealers. Does not contain specific provisions addressing the unique characteristics of fixed income or foreign securities markets. |
| Documentation and Evidence | Firms must be prepared to demonstrate their diligence and the results of their reviews to regulators upon request. | Requires firms to document the results of their quarterly execution quality reviews and the annual review of their policies, creating a more structured and continuous evidentiary trail. |

![A sleek Principal's Operational Framework connects to a glowing, intricate teal ring structure. This depicts an institutional-grade RFQ protocol engine, facilitating high-fidelity execution for digital asset derivatives, enabling private quotation and optimal price discovery within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-execution-engine-for-digital-asset-derivatives-rfq.jpg)

## Strategic Handling of RFQ Protocols

The [RFQ protocol](https://prime.greeks.live/area/rfq-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), used for sourcing liquidity in block trades or for illiquid securities, requires a tailored strategic approach within this unified framework. The subjective nature of selecting counterparties for an RFQ can be a point of regulatory scrutiny. The strategy here is to systematize the process.

- 
**Systematized Counterparty Selection** ▴ The firm must develop a data-driven process for maintaining its list of RFQ counterparties. This involves regularly reviewing the historical performance of counterparties based on factors like response rates, fill rates, and the competitiveness of their quotes relative to the prevailing market at the time of the request. This creates a defensible logic for why certain counterparties are included.

- 
**Contemporaneous Documentation** ▴ For each RFQ, the system must automatically log the counterparties solicited, their responses (including price and size), the time of each response, and the final execution details. This documentation is the primary evidence that the trader surveyed a reasonable portion of the available market, even if that market is bilateral and opaque.

- 
**Benchmarking RFQ Executions** ▴ The [quarterly execution quality](https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) reviews mandated by the SEC must incorporate RFQ activity. This involves comparing the execution price against relevant benchmarks. For an illiquid security, this benchmark might be the last traded price, a volume-weighted average price (VWAP) over a relevant period, or the price from a third-party valuation service. The key is to have a consistent and reasonable methodology for assessing the quality of the priced-through-RFQ execution.

> The strategic management of RFQ protocols transforms them from a discretionary process into a systematic, data-driven function that produces auditable proof of best execution.

![A polished, dark spherical component anchors a sophisticated system architecture, flanked by a precise green data bus. This represents a high-fidelity execution engine, enabling institutional-grade RFQ protocols for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-rfq-core.jpg)

## Addressing Conflicted Transactions and PFOF

The SEC’s explicit focus on conflicted transactions requires a dedicated strategic module within the compliance framework. For firms that receive payment for order flow or engage in principal trading with retail clients, the burden of proof is significantly higher. The strategy must involve a clear firewall, both procedural and technological, that prevents these conflicts from influencing [routing decisions](https://prime.greeks.live/question/how-can-machine-learning-be-deployed-to-improve-execution-routing-decisions-over-time/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

The firm’s order routing system must be programmed with logic that prioritizes execution quality metrics (e.g. [price improvement](https://prime.greeks.live/area/price-improvement/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), speed, certainty of execution) over any remuneration received. The [quarterly execution](https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) quality report must explicitly analyze the execution quality received from venues that provide PFOF against venues that do not. If the analysis reveals that conflicted routing decisions are leading to suboptimal outcomes for clients, the firm is mandated by the SEC’s proposed rule to revise its practices. This creates a powerful incentive to architect routing systems that are agnostic to conflicts, focusing solely on achieving the best possible outcome for the customer order.

![Close-up of intricate mechanical components symbolizing a robust Prime RFQ for institutional digital asset derivatives. These precision parts reflect market microstructure and high-fidelity execution within an RFQ protocol framework, ensuring capital efficiency and optimal price discovery for Bitcoin options](https://options.greeks.live/wp-content/uploads/2025/07/engineered-core-systems-driving-institutional-digital-asset-derivatives-rfq-protocol-execution.jpg)

![A central rod, symbolizing an RFQ inquiry, links distinct liquidity pools and market makers. A transparent disc, an execution venue, facilitates price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-protocol-execution-optimization.jpg)

## Execution

The operational execution of a best execution policy under the combined FINRA and SEC frameworks is a matter of high-fidelity data management, systematic process engineering, and rigorous, evidence-based review. It transforms the abstract principles of the rules into concrete, auditable actions performed by the trading desk and overseen by the compliance function. The focus shifts from intent to demonstrable proof, requiring an infrastructure capable of capturing, analyzing, and acting upon vast amounts of execution data.

![Internal components of a Prime RFQ execution engine, with modular beige units, precise metallic mechanisms, and complex data wiring. This infrastructure supports high-fidelity execution for institutional digital asset derivatives, facilitating advanced RFQ protocols, optimal liquidity aggregation, multi-leg spread trading, and efficient price discovery](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-rfq-engine-for-institutional-digital-asset-options.jpg)

## The Operational Playbook for Compliance

A firm’s execution playbook must be a living document, integrated directly into its Order [Management System](https://prime.greeks.live/question/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (OMS) and Execution Management System (EMS). This playbook details the precise, step-by-step procedures for ensuring and documenting best execution for every order.

- 
**Order Intake and Classification** ▴ Upon receipt, every customer order is automatically classified by the system based on security type (equity, option, fixed income), order size (retail, block), and client type (retail, institutional). This classification determines the specific handling protocol and the relevant best execution factors to prioritize.

- 
**Market and Venue Analysis** ▴ The system must perform a real-time scan of all reasonably available execution venues. This includes lit exchanges, alternative trading systems (ATSs), and, for relevant orders, a pre-defined list of bilateral counterparties for RFQ solicitation. The “reasonable availability” of a venue is an operational determination based on the firm’s ability to connect and route to that venue.

- 
**[Smart Order Routing](https://prime.greeks.live/area/smart-order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SOR) Logic** ▴ The SOR is the engine of the execution process. Its logic must be explicitly designed to prioritize best execution. The parameters of the SOR must be configurable and documented, reflecting the factors outlined in FINRA [Rule 5310](https://prime.greeks.live/area/rule-5310/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (e.g. price, size, speed, likelihood of execution). For conflicted transactions under the SEC’s framework, the SOR logic must be demonstrably firewalled from economic incentives like PFOF.

- 
**Execution and Documentation** ▴ At the point of execution, the system must capture a complete snapshot of the transaction. This includes the time of execution, the price, the venue, the state of the order book at that moment (NBBO), and any price improvement achieved. For RFQs, this record includes all quotes received.

- 
**Post-Trade Review and Feedback Loop** ▴ This is the critical step mandated by the SEC’s proposal. The data captured during execution feeds into a [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) system that powers the [quarterly execution quality review](https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The findings of this review must be translated into actionable changes to the SOR logic, venue selection, or RFQ counterparty lists.

![A macro view of a precision-engineered metallic component, representing the robust core of an Institutional Grade Prime RFQ. Its intricate Market Microstructure design facilitates Digital Asset Derivatives RFQ Protocols, enabling High-Fidelity Execution and Algorithmic Trading for Block Trades, ensuring Capital Efficiency and Best Execution](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-core-system-for-institutional-digital-asset-derivatives-rfq-protocol-execution-and-advanced-market-microstructure-optimization.jpg)

## Quantitative Modeling and Data Analysis

The quarterly [execution quality review](https://prime.greeks.live/area/execution-quality-review/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a quantitative exercise. It requires the firm to compare its execution performance against benchmarks and the quality that might have been obtained from other markets. This necessitates a robust data analysis capability.

> A firm’s ability to prove best execution is directly proportional to the quality and granularity of the data it collects and analyzes.

The following table presents a simplified model of the data that must be analyzed in a quarterly review. It compares the firm’s execution quality across different venues, including a hypothetical internalizer from which the firm might receive PFOF.

| Execution Venue | Total Orders Routed | Avg. Price Improvement (cents/share) | Avg. Execution Speed (ms) | Effective Spread / Quoted Spread (%) | Fill Rate (%) |
| --- | --- | --- | --- | --- | --- |
| NYSE | 1,500,000 | 0.05 | 150 | 95% | 98% |
| NASDAQ | 1,200,000 | 0.04 | 120 | 96% | 99% |
| ATS ‘Alpha’ | 800,000 | 0.15 | 250 | 85% | 92% |
| Internalizer ‘PFOF’ (Conflicted) | 2,500,000 | 0.01 | 50 | 105% | 100% |
| RFQ Counterparty Pool | 500 (block trades) | N/A (Benchmarked to VWAP) | N/A | N/A | 88% |

An analysis of this data would be required to justify the routing decisions. For example, the high volume routed to the ‘PFOF’ Internalizer would come under scrutiny. While it offers high speed and certainty (fill rate), its price improvement is minimal, and the effective spread paid by clients is wider than the quoted spread. The firm would need to document why routing to this venue was in the clients’ best interest, and the SEC’s rule would compel the firm to revise its practices if the data consistently shows inferior price outcomes compared to non-conflicted venues.

![Precision-engineered modular components, with transparent elements and metallic conduits, depict a robust RFQ Protocol engine. This architecture facilitates high-fidelity execution for institutional digital asset derivatives, enabling efficient liquidity aggregation and atomic settlement within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-optimizing-high-fidelity-execution-and-liquidity-aggregation.jpg)

## System Integration and Technological Architecture

The execution of these rules requires a deeply integrated technology stack. The OMS, EMS, and TCA systems cannot operate in isolation. They must communicate seamlessly to create a complete, end-to-end audit trail for the life of an order.

- 
**OMS/EMS Integration** ▴ The OMS, which manages the order lifecycle, must pass detailed order attributes to the EMS. The EMS, containing the SOR and venue connectivity, must pass back granular execution data, including timestamps (using synchronized clocks), venue identifiers, and execution prices down to the microsecond level.

- 
**FIX Protocol Standards** ▴ The Financial Information eXchange (FIX) protocol is the language of this integration. Specific FIX tags must be used to carry information critical for best execution analysis. For example, Tag 30 (LastMkt) indicates the market of execution, Tag 851 (LastLiquidityInd) can indicate whether liquidity was added or removed, and custom tags may be used to track routing decisions and the state of the SOR at the time of routing.

- 
**Data Warehousing and Analytics** ▴ The vast amount of data generated by this process must be stored in a high-performance data warehouse. This repository feeds the TCA platform and allows compliance officers to run ad-hoc queries to investigate specific trades or respond to regulatory inquiries. The architecture must be designed to handle billions of records while providing rapid analytical performance.

Ultimately, executing a compliant best execution strategy is an exercise in systems engineering. It requires building a technological and procedural framework that makes the “best interest” of the client the immutable, guiding principle of the firm’s trading infrastructure.

![A central blue sphere, representing a Liquidity Pool, balances on a white dome, the Prime RFQ. Perpendicular beige and teal arms, embodying RFQ protocols and Multi-Leg Spread strategies, extend to four peripheral blue elements](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-protocol-execution-framework.jpg)

## References

- FINRA. (2021). _Regulatory Notice 21-23 ▴ FINRA Reminds Members of Their Best Execution Obligations_. Financial Industry Regulatory Authority.

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

- SEC. (2022). _Proposed Rule ▴ Regulation Best Execution_. Release No. 34-96496; File No. S7-32-22. U.S. Securities and Exchange Commission.

- O’Hara, M. (1995). _Market Microstructure Theory_. Blackwell Publishing.

- Angel, J. J. Harris, L. E. & Spatt, C. S. (2015). _Equity Trading in the 21st Century ▴ An Update_. Quarterly Journal of Finance, 5(01), 1550001.

- Foucault, T. Pagano, M. & Röell, A. (2013). _Market Liquidity ▴ Theory, Evidence, and Policy_. Oxford University Press.

- Hasbrouck, J. (2007). _Empirical Market Microstructure ▴ The Institutions, Economics, and Econometrics of Securities Trading_. Oxford University Press.

- SEC Office of the Inspector General. (2019). _Evaluation of the SEC’s Oversight of FINRA’s Best Execution Examinations_. Report No. 551. U.S. Securities and Exchange Commission.

![Abstract image showing interlocking metallic and translucent blue components, suggestive of a sophisticated RFQ engine. This depicts the precision of an institutional-grade Crypto Derivatives OS, facilitating high-fidelity execution and optimal price discovery within complex market microstructure for multi-leg spreads and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-market-microstructure-for-institutional-digital-asset-derivatives-rfq.jpg)

## Reflection

The examination of FINRA and SEC best execution frameworks provides the specifications for a critical component of your firm’s operational architecture. The rules themselves are static inputs. The true variable is the quality of the system you design to interpret and act upon them. Consider your current execution management system not as a set of tools, but as an integrated intelligence engine.

Does its logic default to the most favorable client outcome in all market conditions? How does it learn from every trade to refine its future decisions? The regulatory mandates are the minimum standard; the potential for a superior execution framework is the strategic opportunity.

![A sophisticated modular apparatus, likely a Prime RFQ component, showcases high-fidelity execution capabilities. Its interconnected sections, featuring a central glowing intelligence layer, suggest a robust RFQ protocol engine](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-core-for-digital-asset-derivatives-high-fidelity-execution-protocols.jpg)

## Glossary

<a href="https://prime.greeks.live/question/what-role-does-a-resolution-authority-play-in-the-valuation-of-derivatives-during-a-bank-failure/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central glowing core within metallic structures symbolizes an Institutional Grade RFQ engine. This Intelligence Layer enables optimal Price Discovery and High-Fidelity Execution for Digital Asset Derivatives, streamlining Block Trade and Multi-Leg Spread Atomic Settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-microstructure-core.jpg)

## Financial Industry Regulatory Authority

A resolution authority executes a defensible valuation of derivatives to enable orderly loss allocation and prevent systemic contagion. </a><a href="https://prime.greeks.live/area/securities-and-exchange-commission/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, dark, metallic system component features a central circular mechanism with a radiating arm, symbolizing precision in High-Fidelity Execution. This intricate design suggests Atomic Settlement capabilities and Liquidity Aggregation via an advanced RFQ Protocol, optimizing Price Discovery within complex Market Microstructure and Order Book Dynamics on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-prime-os-high-fidelity-execution-protocol-liquidity-market-microstructure.jpg)

## Securities and Exchange Commission

Meaning ▴ The Securities and Exchange Commission, or SEC, operates as a federal agency tasked with protecting investors, maintaining fair and orderly markets, and facilitating capital formation within the United States. </a><a href="https://prime.greeks.live/area/regulation-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision mechanical assembly: black base, intricate metallic components, luminous mint-green ring with dark spherical core. This embodies an institutional Crypto Derivatives OS, its market microstructure enabling high-fidelity execution via RFQ protocols for intelligent liquidity aggregation and optimal price discovery](https://options.greeks.live/wp-content/uploads/2025/08/institutional-crypto-derivatives-rfq-engine-high-fidelity-execution.jpg)

## Regulation Best Execution

Meaning ▴ Regulation Best Execution mandates that financial firms execute client orders at the most favorable terms reasonably available under prevailing market conditions. </a><a href="https://prime.greeks.live/question/how-do-regulators-evaluate-the-reasonable-diligence-used-in-choosing-an-execution-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A light sphere, representing a Principal's digital asset, is integrated into an angular blue RFQ protocol framework. Sharp fins symbolize high-fidelity execution and price discovery](https://options.greeks.live/wp-content/uploads/2025/07/principals-core-asset-rfq-protocol-framework-for-digital-derivatives.jpg)

## Reasonable Diligence

Regulators evaluate reasonable diligence by auditing the design, implementation, and data-driven refinement of a firm's execution process. </a><a href="https://prime.greeks.live/question/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision-engineered metallic discs, interconnected by a central spindle, against a deep void, symbolize the core architecture of an Institutional Digital Asset Derivatives RFQ protocol. This setup facilitates private quotation, robust portfolio margin, and high-fidelity execution, optimizing market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-infrastructure.jpg)

## Execution Management System

The OMS codifies investment strategy into compliant, executable orders; the EMS translates those orders into optimized market interaction. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, cut-open sphere reveals a sharp, luminous green prism, symbolizing high-fidelity execution within a Principal's operational framework. The reflective interior denotes market microstructure insights and latent liquidity in digital asset derivatives, embodying RFQ protocols for alpha generation](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-engine-prime-os-alpha-intelligence.jpg)

## Execution Quality

Meaning ▴ Execution Quality quantifies the efficacy of an order's fill, assessing how closely the achieved trade price aligns with the prevailing market price at submission, alongside consideration for speed, cost, and market impact. </a><a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision algorithmic core with layered rings on a reflective surface signifies high-fidelity execution for institutional digital asset derivatives. It optimizes RFQ protocols for price discovery, channeling dark liquidity within a robust Prime RFQ for capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimized-for-precision.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/policies-and-procedures/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated digital asset derivatives execution platform showcases its core market microstructure. A speckled surface depicts real-time market data streams](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-core-microstructure.jpg)

## Policies and Procedures

Meaning ▴ Policies and Procedures represent the codified framework of an institution's operational directives and the sequential steps for their execution, designed to ensure consistent, predictable behavior within complex digital asset trading systems and to govern all aspects of risk exposure and operational integrity. </a><a href="https://prime.greeks.live/area/compliance-architecture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sharp, intersecting geometric planes in teal, deep blue, and beige form a precise, pointed leading edge against darkness. This signifies High-Fidelity Execution for Institutional Digital Asset Derivatives, reflecting complex Market Microstructure and Price Discovery](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-digital-asset-derivatives-rfq-market-microstructure-2.jpg)

## Compliance Architecture

Meaning ▴ Compliance Architecture constitutes a structured framework of technological systems, processes, and controls designed to ensure rigorous adherence to regulatory mandates, internal risk policies, and best execution principles within institutional digital asset operations. </a><a href="https://prime.greeks.live/area/finra-rule-5310/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A modular, spherical digital asset derivatives intelligence core, featuring a glowing teal central lens, rests on a stable dark base. This represents the precision RFQ protocol execution engine, facilitating high-fidelity execution and robust price discovery within an institutional principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/principal-trading-digital-asset-derivatives-rfq-execution-core.jpg)

## Finra Rule 5310

Meaning ▴ FINRA Rule 5310 mandates broker-dealers diligently seek the best market for customer orders. </a><a href="https://prime.greeks.live/question/how-does-the-luld-plan-impact-erroneous-trade-reviews-during-core-trading/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Institutional-grade infrastructure supports a translucent circular interface, displaying real-time market microstructure for digital asset derivatives price discovery. Geometric forms symbolize precise RFQ protocol execution, enabling high-fidelity multi-leg spread trading, optimizing capital efficiency and mitigating systemic risk](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-request-for-quote-protocol-high-fidelity-execution-market-microstructure-intelligence-layer.jpg)

## Execution Quality Reviews

The LULD Plan proactively contains price volatility, thus minimizing the scope and frequency of reactive erroneous trade reviews. </a><a href="https://prime.greeks.live/area/conflicted-transactions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, futuristic apparatus featuring a central spherical processing unit flanked by dual reflective surfaces and illuminated data conduits. This system visually represents an advanced RFQ protocol engine facilitating high-fidelity execution and liquidity aggregation for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-options-rfq-liquidity-aggregation-interface.jpg)

## Conflicted Transactions

Meaning ▴ Conflicted Transactions refer to execution scenarios where an intermediary's inherent financial interests, such as those derived from proprietary trading or market making, are not fully aligned with the best execution objectives of a client. </a><a href="https://prime.greeks.live/area/payment-for-order-flow/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A futuristic, metallic structure with reflective surfaces and a central optical mechanism, symbolizing a robust Prime RFQ for institutional digital asset derivatives. It enables high-fidelity execution of RFQ protocols, optimizing price discovery and liquidity aggregation across diverse liquidity pools with minimal slippage](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-platform-for-institutional-digital-asset-derivatives-rfq-protocol-optimized-execution-management-system-with-robust-liquidity-sourcing.jpg)

## Payment for Order Flow

Meaning ▴ Payment for Order Flow (PFOF) designates the financial compensation received by a broker-dealer from a market maker or wholesale liquidity provider in exchange for directing client order flow to them for execution. </a><a href="https://prime.greeks.live/area/pfof/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sophisticated teal and black device with gold accents symbolizes a Principal's operational framework for institutional digital asset derivatives. It represents a high-fidelity execution engine, integrating RFQ protocols for atomic settlement](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-core-engine-for-best-execution.jpg)

## Pfof

Meaning ▴ Payment for Order Flow, or PFOF, defines a compensation model where market makers provide financial remuneration to retail brokerage firms for the privilege of executing their clients' order flow. </a><a href="https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered blue mechanism, symbolizing a high-fidelity execution engine, emerges from a rounded, light-colored liquidity pool component, encased within a sleek teal institutional-grade shell. This represents a Principal's operational framework for digital asset derivatives, demonstrating algorithmic trading logic and smart order routing for block trades via RFQ protocols, ensuring atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-crypto-derivatives-os-core-algorithmic-execution-engine.jpg)

## Quarterly Execution Quality Reviews

The audit committee's quarterly process is a systematic validation of internal controls that underpins CEO financial certification. </a><a href="https://prime.greeks.live/area/rfq-protocol/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-core.jpg)

## Rfq Protocol

Meaning ▴ The Request for Quote (RFQ) Protocol defines a structured electronic communication method enabling a market participant to solicit firm, executable prices from multiple liquidity providers for a specified financial instrument and quantity. </a><a href="https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central glowing blue mechanism with a precision reticle is encased by dark metallic panels. This symbolizes an institutional-grade Principal's operational framework for high-fidelity execution of digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/precision-core-enabling-institutional-digital-asset-derivatives-rfq-execution.jpg)

## Quarterly Execution Quality

The audit committee's quarterly process is a systematic validation of internal controls that underpins CEO financial certification. </a><a href="https://prime.greeks.live/question/how-can-machine-learning-be-deployed-to-improve-execution-routing-decisions-over-time/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark blue, precision-engineered blade-like instrument, representing a digital asset derivative or multi-leg spread, rests on a light foundational block, symbolizing a private quotation or block trade. This structure intersects robust teal market infrastructure rails, indicating RFQ protocol execution within a Prime RFQ for high-fidelity execution and liquidity aggregation in institutional trading](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-framework-multi-leg-spreads-best-execution-capital-efficiency.jpg)

## Routing Decisions

ML improves execution routing by using reinforcement learning to dynamically adapt to market data and optimize decisions over time. </a><a href="https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?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)

## Quarterly Execution

The audit committee's quarterly process is a systematic validation of internal controls that underpins CEO financial certification. </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 central core, symbolizing a Crypto Derivatives OS and Liquidity Pool, is intersected by two abstract elements. These represent Multi-Leg Spread and Cross-Asset Derivatives executed via RFQ Protocol](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-protocol-multi-leg-spread-execution.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/question/what-is-the-relationship-between-an-order-management-system-and-an-execution-management-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A textured spherical digital asset, resembling a lunar body with a central glowing aperture, is bisected by two intersecting, planar liquidity streams. This depicts institutional RFQ protocol, optimizing block trade execution, price discovery, and multi-leg options strategies with high-fidelity execution within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-optimized-rfq-execution-protocol-dynamic-liquidity-management.jpg)

## Management System

The OMS codifies investment strategy into compliant, executable orders; the EMS translates those orders into optimized market interaction. </a><a href="https://prime.greeks.live/area/smart-order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Smart Order Routing

Meaning ▴ Smart Order Routing is an algorithmic execution mechanism designed to identify and access optimal liquidity across disparate trading venues. </a><a href="https://prime.greeks.live/area/rule-5310/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A stylized RFQ protocol engine, featuring a central price discovery mechanism and a high-fidelity execution blade. Translucent blue conduits symbolize atomic settlement pathways for institutional block trades within a Crypto Derivatives OS, ensuring capital efficiency and best execution](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-for-digital-asset-derivatives.jpg)

## Rule 5310

Meaning ▴ Rule 5310 mandates that registered persons provide written notice to their firm regarding any outside business activities, allowing the firm to assess and approve or disapprove such engagements. </a><a href="https://prime.greeks.live/question/what-specific-steps-should-an-audit-committee-take-quarterly-before-ceo-certification/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A cutaway view reveals an advanced RFQ protocol engine for institutional digital asset derivatives. Intricate coiled components represent algorithmic liquidity provision and portfolio margin calculations](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-engine-digital-asset-derivatives-core-internal-mechanism-visualized.jpg)

## Quarterly Execution Quality Review

The audit committee's quarterly process is a systematic validation of internal controls that underpins CEO financial certification. </a><a href="https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark cylindrical core precisely intersected by sharp blades symbolizes RFQ Protocol and High-Fidelity Execution. Spheres represent Liquidity Pools and Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-execution-for-institutional-digital-asset-derivatives.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/execution-quality-review/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered metallic component displays two interlocking gold modules with circular execution apertures, anchored by a central pivot. This symbolizes an institutional-grade digital asset derivatives platform, enabling high-fidelity RFQ execution, optimized multi-leg spread management, and robust prime brokerage liquidity](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-core-for-institutional-trade-flow.jpg)

## Execution Quality Review

Meaning ▴ Execution Quality Review (EQR) represents the systematic, data-driven process of evaluating the efficacy and cost efficiency of trade executions against predefined benchmarks and market conditions. </a>

**Tags:** [SEC Regulation Best Execution](https://options.greeks.live/area/sec-regulation-best-execution/), [Regulation Best Execution](https://options.greeks.live/area/regulation-best-execution/), [Execution Quality](https://options.greeks.live/area/execution-quality/), [Market Microstructure](https://options.greeks.live/area/market-microstructure/), [Request for Quote](https://options.greeks.live/area/request-for-quote/), [Best Execution](https://options.greeks.live/area/best-execution/)	

## Discover More

- 
### [What Are the Primary Regulatory Drivers for Establishing a Best Execution Committee?](https://options.greeks.live/question/what-are-the-primary-regulatory-drivers-for-establishing-a-best-execution-committee/)
![A sophisticated modular component of a Crypto Derivatives OS, featuring an intelligence layer for real-time market microstructure analysis. Its precision engineering facilitates high-fidelity execution of digital asset derivatives via RFQ protocols, ensuring optimal price discovery and capital efficiency for institutional participants.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-module.jpg)

The primary regulatory drivers for a Best Execution Committee are mandates designed to enforce a firm's fiduciary duty through a formal, documented governance structure.

- 
### [What Are the Practical Steps to Build a Defensible Best Execution Policy under FINRA Rule 5310?](https://options.greeks.live/question/what-are-the-practical-steps-to-build-a-defensible-best-execution-policy-under-finra-rule-5310/)
![A complex, multi-faceted crystalline object rests on a dark, reflective base against a black background. This abstract visual represents the intricate market microstructure of institutional digital asset derivatives. It symbolizes multi-leg spreads, implied volatility surfaces, and the precise price discovery within RFQ protocols for high-fidelity execution on a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-execution-architecture.jpg)

A defensible best execution policy is a dynamic, data-driven operational system for navigating market complexity.

- 
### [How Does Payment for Order Flow Complicate a Firm’s Ability to Demonstrate Rigorous Best Execution?](https://options.greeks.live/question/how-does-payment-for-order-flow-complicate-a-firms-ability-to-demonstrate-rigorous-best-execution/)
![A complex, multi-layered electronic component with a central connector and fine metallic probes. This represents a critical Prime RFQ module for institutional digital asset derivatives trading, enabling high-fidelity execution of RFQ protocols, price discovery, and atomic settlement for multi-leg spreads with minimal latency.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-rfq-engine-driving-best-execution-and-liquidity.jpg)

Payment for order flow complicates best execution by creating a conflict of interest that must be neutralized through rigorous, data-driven analysis of execution quality.

- 
### [How Should a Best Execution Charter Address Potential Conflicts of Interest like Payment for Order Flow?](https://options.greeks.live/question/how-should-a-best-execution-charter-address-potential-conflicts-of-interest-like-payment-for-order-flow/)
![A circular mechanism with a glowing conduit and intricate internal components represents a Prime RFQ for institutional digital asset derivatives. This system facilitates high-fidelity execution via RFQ protocols, enabling price discovery and algorithmic trading within market microstructure, optimizing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-protocol-core.jpg)

A Best Execution Charter codifies a firm's fiduciary duty into an operational system that subordinates PFOF incentives to verifiable execution quality.

- 
### [What Are the Primary Responsibilities of a Broker-Dealer’s Best Execution Committee?](https://options.greeks.live/question/what-are-the-primary-responsibilities-of-a-broker-dealers-best-execution-committee/)
![A translucent teal dome, brimming with luminous particles, symbolizes a dynamic liquidity pool within an RFQ protocol. Precisely mounted metallic hardware signifies high-fidelity execution and the core intelligence layer for institutional digital asset derivatives, underpinned by granular market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-intelligence-layer.jpg)

A Broker-Dealer's Best Execution Committee is the firm's governing body for ensuring and documenting that all client trades achieve the most favorable terms reasonably available.

- 
### [What Are the Regulatory Implications of Failing to Quantify Best Execution Adequately?](https://options.greeks.live/question/what-are-the-regulatory-implications-of-failing-to-quantify-best-execution-adequately/)
![Abstract dual-cone object reflects RFQ Protocol dynamism. It signifies robust Liquidity Aggregation, High-Fidelity Execution, and Principal-to-Principal negotiation. Essential for Crypto Derivatives OS Block Trades, ensuring Atomic Settlement and Volatility Surface integrity.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-grade-rfq-execution-framework-for-digital-asset-derivatives-optimal-liquidity-aggregation-and-atomic-settlement.jpg)

Failing to quantify best execution creates severe regulatory risk by replacing required empirical proof with indefensible qualitative claims.

- 
### [How Do MiFID II Best Execution Rules Differ from US Requirements?](https://options.greeks.live/question/how-do-mifid-ii-best-execution-rules-differ-from-us-requirements/)
![Internal components of a Prime RFQ execution engine, with modular beige units, precise metallic mechanisms, and complex data wiring. This infrastructure supports high-fidelity execution for institutional digital asset derivatives, facilitating advanced RFQ protocols, optimal liquidity aggregation, multi-leg spread trading, and efficient price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-rfq-engine-for-institutional-digital-asset-options.jpg)

MiFID II and US best execution rules differ in their core philosophy: the EU mandates a prescriptive, data-heavy process, while the US requires a principles-based demonstration of reasonable diligence.

- 
### [How Does the New Framework Alter the Role of a Firm’s Best Execution Committee?](https://options.greeks.live/question/how-does-the-new-framework-alter-the-role-of-a-firms-best-execution-committee/)
![A polished metallic modular hub with four radiating arms represents an advanced RFQ execution engine. This system aggregates multi-venue liquidity for institutional digital asset derivatives, enabling high-fidelity execution and precise price discovery across diverse counterparty risk profiles, powered by a sophisticated intelligence layer.](https://options.greeks.live/wp-content/uploads/2025/08/principal-rfq-hub-digital-asset-derivatives-liquidity-aggregation.jpg)

The new framework elevates the Best Execution Committee from a compliance function to a strategic, data-driven hub for execution intelligence.

- 
### [What Are the Specific Regulatory Requirements for a Best Execution Committee?](https://options.greeks.live/question/what-are-the-specific-regulatory-requirements-for-a-best-execution-committee/)
![Three sensor-like components flank a central, illuminated teal lens, reflecting an advanced RFQ protocol system. This represents an institutional digital asset derivatives platform's intelligence layer for precise price discovery, high-fidelity execution, and managing multi-leg spread strategies, optimizing market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-optimal-execution.jpg)

A Best Execution Committee is a firm's strategic and regulatory imperative for ensuring optimal client order execution.

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---

**Original URL:** https://options.greeks.live/question/what-are-the-core-differences-between-finra-and-sec-rules-on-rfq-for-best-execution/
