# What Are the Key Differences in Best Execution Obligations between an SI and a Traditional Broker? ▴ Question

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

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![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)

![A dynamic central nexus of concentric rings visualizes Prime RFQ aggregation for digital asset derivatives. Four intersecting light beams delineate distinct liquidity pools and execution venues, emphasizing high-fidelity execution and precise price discovery](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-hub-for-digital-asset-derivatives-execution.jpg)

## Concept

The distinction between the [best execution obligations](https://prime.greeks.live/area/best-execution-obligations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) of a [Systematic Internalisers](https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SI) and a traditional broker is not a matter of slight regulatory nuance; it is a fundamental divergence in operational architecture and market philosophy. This difference originates from the core function of each entity within the market ecosystem. A broker operates on an agency basis, tasked with a mandate to navigate the entire market landscape to secure the optimal outcome for a client’s order. Its duty is one of exploration and advocacy on behalf of the client.

An SI, conversely, operates as a principal, dealing on its own account to execute client orders. It is a self-contained liquidity source, a counterparty that internalizes order flow. This principal-versus-agent dynamic is the genetic code from which all differences in their [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) responsibilities arise.

Under the Markets in Financial Instruments Directive II (MiFID II), best execution is a mandate for investment firms to take “[all sufficient steps](https://prime.greeks.live/area/all-sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” to obtain the best possible result for their clients. This is a multi-dimensional objective, weighing factors such as price, costs, speed, and the likelihood of execution and settlement. For a broker, fulfilling this mandate involves a comprehensive, outward-facing process of [venue selection](https://prime.greeks.live/area/venue-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and order routing.

The broker’s systems must demonstrate a sophisticated and evidence-based approach to sourcing liquidity. The obligation is procedural and demonstrative; the broker must prove it has a robust system in place to hunt for the best result across a fragmented marketplace that includes regulated markets, Multilateral Trading Facilities (MTFs), and SIs themselves.

> The core operational distinction lies in whether a firm acts as an agent searching the market for liquidity or as a principal providing its own liquidity.

The SI’s obligation is structured differently, centered on [pre-trade transparency](https://prime.greeks.live/area/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and the concept of a “fair price.” As a principal, the SI’s primary role is to provide liquidity from its own book. Its best execution duty is met by ensuring the prices it quotes are competitive and reflective of [prevailing market conditions](https://prime.greeks.live/area/prevailing-market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). For liquid instruments, this involves an obligation to make firm quotes public up to a certain size. The SI is not required to survey the entire market for a better price for the client; instead, it must ensure its own price is fair and transparent.

The client, in choosing to trade with an SI, is selecting a specific, bilateral source of liquidity. The regulatory framework recognizes this by focusing the SI’s obligations on the integrity of its own quotes and its non-discriminatory commercial policies, rather than on a market-wide search for liquidity. This creates two distinct, yet interconnected, pathways for achieving best execution within the European market structure.

![A spherical Liquidity Pool is bisected by a metallic diagonal bar, symbolizing an RFQ Protocol and its Market Microstructure. Imperfections on the bar represent Slippage challenges in High-Fidelity Execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-optimization-within-principals-market-microstructure-framework.jpg)

![The abstract image features angular, parallel metallic and colored planes, suggesting structured market microstructure for digital asset derivatives. A spherical element represents a block trade or RFQ protocol inquiry, reflecting dynamic implied volatility and price discovery within a dark pool](https://options.greeks.live/wp-content/uploads/2025/07/optimized-institutional-digital-asset-derivatives-rfq-protocol-framework-ensuring-principal-best-execution-and-latent-liquidity-capture.jpg)

## Strategy

The strategic frameworks for fulfilling best [execution obligations](https://prime.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-impact-rfq-execution-and-best-execution-obligations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) diverge significantly between Systematic Internalisers and traditional brokers, reflecting their contrary positions as principal and agent. These differences manifest in their approach to risk management, [liquidity sourcing](https://prime.greeks.live/area/liquidity-sourcing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), and client interaction. Understanding these strategic postures is essential for any market participant seeking to optimize their execution outcomes.

![A sophisticated proprietary system module featuring precision-engineered components, symbolizing an institutional-grade Prime RFQ for digital asset derivatives. Its intricate design represents market microstructure analysis, RFQ protocol integration, and high-fidelity execution capabilities, optimizing liquidity aggregation and price discovery for block trades within a multi-leg spread environment](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-proprietary-architecture-driving-high-fidelity-digital-asset-derivatives-execution-via-rfq-protocols-and-optimized-market-microstructure-dynamics.jpg)

## The Broker’s Strategic Mandate a System of Diligent Search

A broker’s strategic imperative is to construct and maintain a sophisticated, evidence-based process for sourcing liquidity. This is a strategy of breadth and diligence. The core of this strategy is the firm’s [Order Execution Policy](https://prime.greeks.live/area/order-execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), a document that is far more than a compliance formality.

It is the blueprint for how the firm will navigate the complex web of available trading venues to fulfill its agency duty. The policy must detail the relative importance of the best execution factors (price, cost, speed, etc.) and justify the selection of execution venues for different instrument classes.

The broker’s strategy involves several key pillars:

- **Venue Analysis** ▴ The broker must continuously analyze the [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) offered by a range of venues, including regulated markets, MTFs, OTFs, and SIs. This analysis forms the basis for the venue selection outlined in the [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). 

- **[Smart Order Routing](https://prime.greeks.live/area/smart-order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SOR)** ▴ Sophisticated brokers deploy SOR technology. This is an automated system that dynamically routes orders or portions of orders to the venues most likely to provide the best result according to the parameters defined in the execution policy. The SOR is the technological embodiment of the “all [sufficient steps](https://prime.greeks.live/area/sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)” requirement. 

- **[Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA)** ▴ Post-trade, the broker must engage in rigorous TCA to measure the effectiveness of its execution strategy. This data-driven feedback loop is used to refine the Order Execution Policy and the logic of the SOR, ensuring the firm’s approach adapts to changing [market conditions](https://prime.greeks.live/area/market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). 

![Precision metallic component, possibly a lens, integral to an institutional grade Prime RFQ. Its layered structure signifies market microstructure and order book dynamics](https://options.greeks.live/wp-content/uploads/2025/08/high-fidelity-institutional-digital-asset-rfq-execution-engine.jpg)

## The Systematic Internaliser’s Strategic Mandate a System of Controlled Provision

The strategy of a [Systematic Internaliser](https://prime.greeks.live/area/systematic-internaliser/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is fundamentally one of [risk management](https://prime.greeks.live/area/risk-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and controlled liquidity provision. As a principal, the SI is trading for its own account and managing its own inventory. Its best execution obligation is therefore intrinsically linked to its business model. The SI’s goal is to attract order flow by offering competitive, reliable quotes while managing the risk of holding positions.

The SI’s strategy is built on these components:

- **Pre-Trade Transparency and Quoting** ▴ For liquid instruments, the SI’s core strategic activity is the provision of firm quotes. The SI must make these quotes public to its clients upon request. The quality and competitiveness of these quotes are the primary mechanism through which the SI meets its best execution obligation and attracts business. The price must reflect [prevailing market](https://prime.greeks.live/question/how-can-a-firm-quantitatively-demonstrate-that-its-quotes-reflect-prevailing-market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) conditions. 

- **Risk Management** ▴ The SI’s [pricing engine](https://prime.greeks.live/area/pricing-engine/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a complex system that takes into account not only external market prices but also the SI’s own inventory, risk limits, and desired positions. The ability to update quotes at any time is a critical tool for managing this risk. 

- **Client Segmentation** ▴ [MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) allows SIs to have a “commercial policy” that can, on a non-discriminatory basis, determine which clients have access to its quotes and the number of transactions they can execute. This allows the SI to manage its counterparty risk and tailor its services. 

> A broker’s strategy is defined by the breadth of its search for external liquidity, while an SI’s strategy is defined by the integrity and competitiveness of its internal liquidity.

![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)

## A Comparative Analysis of Strategic Frameworks

The following table provides a comparative view of the strategic orientation of brokers and SIs in the context of their best execution obligations.

| Strategic Factor | Traditional Broker (Agent) | Systematic Internaliser (Principal) |
| --- | --- | --- |
| Core Objective | To find the best possible result for the client by searching across multiple external venues. | To provide a competitive quote from its own book and manage the associated principal risk. |
| Primary Tool | Order Execution Policy and Smart Order Router (SOR). | Proprietary pricing engine and quote dissemination system. |
| Risk Posture | Acts as an agent, bearing no market risk from the client’s position. The primary risk is operational and reputational. | Acts as a principal, taking on market risk by trading against the client. Risk management is central to the business model. |
| Liquidity Approach | Liquidity aggregation. The broker connects to and aggregates liquidity from various sources. | Liquidity provision. The SI creates and provides its own liquidity to clients. |
| Demonstration of Best Execution | Demonstrated through a robust process, detailed policies, and post-trade analysis (e.g. RTS 28 reports). | Demonstrated through adherence to quoting obligations and providing prices that are fair relative to prevailing market conditions (e.g. RTS 27 reports). |

![A precision-engineered metallic cross-structure, embodying an RFQ engine's market microstructure, showcases diverse elements. One granular arm signifies aggregated liquidity pools and latent liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-microstructure-for-atomic-settlement.jpg)

![A dark, precision-engineered module with raised circular elements integrates with a smooth beige housing. It signifies high-fidelity execution for institutional RFQ protocols, ensuring robust price discovery and capital efficiency in digital asset derivatives market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-system-core-high-speed-price-discovery-module.jpg)

## Execution

The execution of best execution obligations translates the strategic mandates of Systematic Internalisers and brokers into concrete, auditable operational workflows. The regulatory framework, particularly through the detailed requirements of Regulatory Technical Standards (RTS) 27 and 28, provides a blueprint for these workflows. For an institutional trader, understanding these operational mechanics is paramount to effectively leveraging both types of counterparties.

![Intricate mechanisms represent a Principal's operational framework, showcasing market microstructure of a Crypto Derivatives OS. Transparent elements signify real-time price discovery and high-fidelity execution, facilitating robust RFQ protocols for institutional digital asset derivatives and options trading](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-protocol-engine-for-institutional-digital-asset-derivatives.jpg)

## The Broker’s Execution Playbook Demonstrating All Sufficient Steps

A broker’s [execution framework](https://prime.greeks.live/area/execution-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) is a continuous cycle of policy, action, and review. The obligation to take “all sufficient steps” requires a dynamic and evidence-based system. The operational playbook for a broker is centered on proving the diligence of its search for liquidity.

![The central teal core signifies a Principal's Prime RFQ, routing RFQ protocols across modular arms. Metallic levers denote precise control over multi-leg spread execution and block trades](https://options.greeks.live/wp-content/uploads/2025/07/principals-prime-os-rfq-system-institutional-digital-asset-derivatives.jpg)

## Operational Workflow

- **Policy Formulation and Review** ▴ At least annually, the broker’s governance committee must review and approve the [Order Execution](https://prime.greeks.live/area/order-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) Policy. This review must incorporate data from TCA and venue analysis to ensure the list of execution venues and the logic for venue selection remain appropriate. 

- **Order Reception and Characterization** ▴ When a client order is received, the system characterizes it based on instrument type, size, and client classification (retail or professional). This determines which aspects of the execution policy apply. 

- **Smart [Order Routing](https://prime.greeks.live/area/order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (SOR) Logic** ▴ The SOR accesses real-time data from the venues listed in the policy. It evaluates potential execution outcomes based on the weighted importance of the best execution factors (e.g. for a small, liquid order, price and cost may be paramount; for a large, illiquid order, the likelihood of execution may be the primary driver). 

- **Execution and Monitoring** ▴ The SOR routes the order. The execution desk monitors the execution quality in real-time, with the ability to intervene manually if the automated system is not achieving the desired outcome. 

- **Post-Trade Reporting and Analysis** ▴ The execution data is captured and fed into two critical reporting streams:

<li> **To the Client** ▴ Confirmation of execution details. 

- **To the Public/Regulator ([RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite))** ▴ Annually, the broker must publish a report summarizing the top five execution venues used for each class of financial instrument and a summary of the analysis of the execution quality obtained. 

</li>

![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)

## RTS 28 a Public Accounting of Diligence

The RTS 28 report is the broker’s public testament to its best execution process. It forces transparency upon the broker’s routing decisions. The table below is a simplified example of the type of data a broker must disclose, demonstrating its venue selection process.

| Financial Instrument Class | Top 5 Venues by Volume | Percentage of Volume | Percentage of Orders | Percentage of Passive Orders | Percentage of Aggressive Orders |
| --- | --- | --- | --- | --- | --- |
| Equities – Large Cap (S&P 500) | Venue A (Regulated Market) | 45% | 35% | 60% | 40% |
| | Venue B (MTF) | 25% | 30% | 55% | 45% |
| | Venue C (Systematic Internaliser) | 15% | 20% | N/A | 100% |
| | Venue D (MTF – Dark Pool) | 10% | 10% | 100% | 0% |
| | Venue E (Regulated Market) | 5% | 5% | 70% | 30% |

![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)

## The Systematic Internaliser’s Execution Playbook Demonstrating a Fair Price

An SI’s execution framework is focused inward, on the integrity of its own pricing and quoting mechanisms. The operational playbook is about ensuring its [principal trading](https://prime.greeks.live/area/principal-trading/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) activity adheres to strict transparency and fairness standards.

![A sleek, illuminated object, symbolizing an advanced RFQ protocol or Execution Management System, precisely intersects two broad surfaces representing liquidity pools within market microstructure. Its glowing line indicates high-fidelity execution and atomic settlement of digital asset derivatives, ensuring best execution and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/principals-rfq-protocol-high-fidelity-execution-digital-asset-derivatives-market-microstructure-price-discovery-alpha-generation.jpg)

## Operational Workflow

- **Market Data Ingestion** ▴ The SI’s pricing engine continuously ingests market data from multiple sources (e.g. regulated markets, data vendors) to establish a baseline for “prevailing market conditions.” 

- **Quote Generation and Dissemination** ▴ For liquid instruments, when a client requests a quote, the SI is obligated to provide a firm, two-way price. This quote is generated by the pricing engine, which factors in the market baseline, the SI’s own risk and inventory, and a spread. The quote is then made available to the client, and potentially to other clients, based on the SI’s commercial policy. 

- **Execution at or within the Quote** ▴ When a client chooses to trade on the quote, the SI executes the trade from its own account. The SI can execute at the quoted price or offer price improvement, executing at a price more favorable to the client. 

- **Post-Trade Reporting ([RTS 27](https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite))** ▴ The SI, as an execution venue, has a significant reporting burden. It must publish quarterly reports (RTS 27) that provide detailed data on the quality of execution it has provided. This includes information on price, costs, and speed of execution for individual financial instruments. 

> The broker’s execution is proven through public reports on where it sends orders (RTS 28), while the SI’s execution is proven through public reports on the quality of trades it executes internally (RTS 27).

![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)

## RTS 27 a Granular Look at Execution Quality

The RTS 27 report provides a much more granular view of execution quality at the instrument level. It is the SI’s data-driven proof that it is providing fair prices. The table below gives a conceptual example of the kind of data an SI would report for a single corporate bond.

| Metric | Value | Commentary |
| --- | --- | --- |
| Instrument | XYZ Corp 3.5% 2030 Bond | Data for Q3 2025 |
| Average Price | 101.25 EUR | Volume-weighted average price of all executions. |
| Average Spread | 5.2 bps | Average spread between bid and offer quotes provided. |
| Price Improvement | 38% of orders | Percentage of client orders executed at a better price than the original quote. |
| Average Execution Speed | 150 milliseconds | Time from order receipt to execution confirmation. |
| Total Volume Executed | 500,000,000 EUR | Total notional value traded in the instrument during the quarter. |

![A metallic precision tool rests on a circuit board, its glowing traces depicting market microstructure and algorithmic trading. A reflective disc, symbolizing a liquidity pool, mirrors the tool, highlighting high-fidelity execution and price discovery for institutional digital asset derivatives via RFQ protocols and Principal's Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocols-driving-high-fidelity-execution-and-market-microstructure-optimization-via-principal-prime-os.jpg)

## References

- International Capital Market Association. “MiFID II implementation ▴ the Systematic Internalisers regime.” 2017.

- CFA Institute. “MiFID II and Systematic Internalisers ▴ If Only Someone Knew This Would Happen.” 2018.

- European Securities and Markets Authority. “MiFIR report on systematic internalisers in non-equity instruments.” ESMA70-156-2756, 2020.

- Planet Compliance. “In a nutshell ▴ Best Execution under MiFID II/MiFIR.” 2024.

- European Securities and Markets Authority. “Best Execution under MiFID Questions & Answers.” 2007.

- Harris, Larry. “Trading and exchanges ▴ Market microstructure for practitioners.” Oxford University Press, 2003.

- O’Hara, Maureen. “Market microstructure theory.” Blackwell, 1995.

- European Parliament and Council. “Directive 2014/65/EU on markets in financial instruments (MiFID II).” 2014.

![Reflective planes and intersecting elements depict institutional digital asset derivatives market microstructure. A central Principal-driven RFQ protocol ensures high-fidelity execution and atomic settlement across diverse liquidity pools, optimizing multi-leg spread strategies on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-precision.jpg)

## Reflection

![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)

## Calibrating the Execution Framework

The examination of best execution obligations for Systematic Internalisers and brokers moves beyond a simple compliance checklist. It prompts a deeper inquiry into the very architecture of an institution’s trading strategy. The choice is not between a “good” and “bad” counterparty, but between two fundamentally different systems of liquidity and risk transfer. The critical question for a portfolio manager or head of trading becomes ▴ which system is optimally aligned with the specific objectives of this particular trade, at this particular moment?

Does the order demand the broad, market-wide search of an agent, whose value is measured by the diligence of their process? Or does it benefit from the direct, principal-based liquidity of an SI, where value is found in the competitiveness of a single, firm quote? Viewing these entities as interchangeable components within a trading system is a strategic error. A more sophisticated approach recognizes them as distinct protocols, each with its own use case.

The true mastery of execution lies in understanding this distinction and building an operational framework that can intelligently select the appropriate protocol based on the unique characteristics of each order ▴ its size, its urgency, its information content, and the prevailing market state. The knowledge gained here is a component in that larger system of intelligence, a step toward an execution framework that is not merely compliant, but strategically superior.

![A reflective disc, symbolizing a Prime RFQ data layer, supports a translucent teal sphere with Yin-Yang, representing Quantitative Analysis and Price Discovery for Digital Asset Derivatives. A sleek mechanical arm signifies High-Fidelity Execution and Algorithmic Trading via RFQ Protocol, within a Principal's Operational Framework](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-digital-asset-derivatives-rfq-protocols-principal-trading-infrastructure-automated-liquidity-aggregation-intelligence-layer.jpg)

## Glossary

<a href="https://prime.greeks.live/area/best-execution-obligations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision sphere, an Execution Management System EMS, probes a Digital Asset Liquidity Pool. This signifies High-Fidelity Execution via Smart Order Routing for institutional-grade digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-orchestrating-global-digital-asset-derivatives-liquidity-pool-price-discovery-and-high-fidelity-execution.jpg)

## Best Execution Obligations

Meaning ▴ Best Execution Obligations define the regulatory and fiduciary imperative for financial intermediaries to achieve the most favorable terms reasonably available for client orders. </a><a href="https://prime.greeks.live/area/systematic-internalisers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two distinct ovular components, beige and teal, slightly separated, reveal intricate internal gears. This visualizes an Institutional Digital Asset Derivatives engine, emphasizing automated RFQ execution, complex market microstructure, and high-fidelity execution within a Principal's Prime RFQ for optimal price discovery and block trade capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-automated-rfq-execution-microstructure-revealing-principal-prime-os-intelligence-layer-for-high-fidelity-execution-and-capital-efficiency.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/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two sharp, intersecting blades, one white, one blue, represent precise RFQ protocols and high-fidelity execution within complex market microstructure. Behind them, translucent wavy forms signify dynamic liquidity pools, multi-leg spreads, and volatility surfaces](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-optimized-liquidity-aggregation-principal-prime-os-intelligence-layer.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/all-sufficient-steps/?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)

## 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/area/venue-selection/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## 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/prevailing-market-conditions/?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)

## Prevailing Market Conditions

Meaning ▴ Prevailing Market Conditions refers to the aggregate, real-time state of quantitative and qualitative factors influencing asset valuation and transaction dynamics within a specific market segment, encompassing elements such as liquidity, volatility, order book depth, bid-ask spreads, and relevant macroeconomic indicators. </a><a href="https://prime.greeks.live/area/pre-trade-transparency/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A 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)

## Pre-Trade Transparency

Meaning ▴ Pre-Trade Transparency refers to the real-time dissemination of bid and offer prices, along with associated sizes, prior to the execution of a trade. </a><a href="https://prime.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-impact-rfq-execution-and-best-execution-obligations/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstractly depicting an Institutional Grade Crypto Derivatives OS component. Its robust structure and metallic interface signify precise Market Microstructure for High-Fidelity Execution of RFQ Protocol and Block Trade orders](https://options.greeks.live/wp-content/uploads/2025/07/principals-integrated-crypto-derivatives-rfq-protocol-architecture.jpg)

## Execution Obligations

MiFID II mandates that RFQ protocols evolve from discretionary conversations into auditable, data-driven demonstrations of best execution. </a><a href="https://prime.greeks.live/area/liquidity-sourcing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![The abstract visual depicts a sophisticated, transparent execution engine showcasing market microstructure for institutional digital asset derivatives. Its central matching engine facilitates RFQ protocol execution, revealing internal algorithmic trading logic and high-fidelity execution pathways](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-for-institutional-digital-asset-derivatives.jpg)

## Liquidity Sourcing

Meaning ▴ Liquidity Sourcing refers to the systematic process of identifying, accessing, and aggregating available trading interest across diverse market venues to facilitate optimal execution of financial transactions. </a><a href="https://prime.greeks.live/area/order-execution-policy/?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)

## Order Execution Policy

Meaning ▴ An Order Execution Policy defines the systematic procedures and criteria governing how an institutional trading desk processes and routes client or proprietary orders across various liquidity venues. </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 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)

## 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/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract depiction of an advanced institutional trading system, featuring a prominent sensor for real-time price discovery and an intelligence layer. Visible circuitry signifies algorithmic trading capabilities, low-latency execution, and robust FIX protocol integration for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-high-fidelity-rfq-protocols.jpg)

## Execution Policy

Meaning ▴ An Execution Policy defines a structured set of rules and computational logic governing the handling and execution of financial orders within a trading system. </a><a href="https://prime.greeks.live/area/smart-order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, multi-component device with a dark blue base and beige bands culminates in a sophisticated top mechanism. This precision instrument symbolizes a Crypto Derivatives OS facilitating RFQ protocol for block trade execution, ensuring high-fidelity execution and atomic settlement for institutional-grade digital asset derivatives across diverse liquidity pools](https://options.greeks.live/wp-content/uploads/2025/08/advanced-mechanism-for-principal-trading-firm-rfq-protocols-and-high-fidelity-digital-asset-derivatives-execution.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/sufficient-steps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, multi-component device in dark blue and beige, symbolizing an advanced institutional digital asset derivatives platform. The central sphere denotes a robust liquidity pool for aggregated inquiry](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-execution-platform-system.jpg)

## Sufficient Steps

Meaning ▴ Sufficient Steps constitute the minimum, verifiable sequence of operations required to achieve a defined, deterministic outcome within a financial protocol or system, ensuring operational closure and state transition. </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 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)

## 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/market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Market Conditions

Meaning ▴ Market Conditions denote the aggregate state of variables influencing trading dynamics within a given asset class, encompassing quantifiable metrics such as prevailing liquidity levels, volatility profiles, order book depth, bid-ask spreads, and the directional pressure of order flow. </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 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)

## 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/risk-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A detailed view of an institutional-grade Digital Asset Derivatives trading interface, featuring a central liquidity pool visualization through a clear, tinted disc. Subtle market microstructure elements are visible, suggesting real-time price discovery and order book dynamics](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-system-microstructure-display.jpg)

## Risk Management

Meaning ▴ Risk Management is the systematic process of identifying, assessing, and mitigating potential financial exposures and operational vulnerabilities within an institutional trading framework. </a><a href="https://prime.greeks.live/question/how-can-a-firm-quantitatively-demonstrate-that-its-quotes-reflect-prevailing-market-conditions/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A multi-layered, circular device with a central concentric lens. It symbolizes an RFQ engine for precision price discovery and high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-for-precision-execution.jpg)

## Prevailing Market

A firm proves its quotes reflect market conditions by systematically benchmarking them against a synthesized, multi-factor market price. </a><a href="https://prime.greeks.live/area/pricing-engine/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract clear and teal geometric forms, including a central lens, intersect a reflective metallic surface on black. This embodies market microstructure precision, algorithmic trading for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-prime-os.jpg)

## Pricing Engine

Meaning ▴ A Pricing Engine is a sophisticated computational module designed for the real-time valuation and quotation generation of financial instruments, particularly complex digital asset derivatives. </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">
![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)

## 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-framework/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Sleek metallic structures with glowing apertures symbolize institutional RFQ protocols. These represent high-fidelity execution and price discovery across aggregated liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/precision-digital-asset-derivatives-trading-systems-optimizing-rfq-protocols-for-institutional-block-trade-execution.jpg)

## Execution Framework

Meaning ▴ An Execution Framework represents a comprehensive, programmatic system designed to facilitate the systematic processing and routing of trading orders across various market venues, optimizing for predefined objectives such as price, speed, or minimized market impact. </a><a href="https://prime.greeks.live/area/order-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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)

## Order Execution

Meaning ▴ Order Execution defines the precise operational sequence that transforms a Principal's trading intent into a definitive, completed transaction within a digital asset market. </a><a href="https://prime.greeks.live/area/order-routing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Symmetrical precision modules around a central hub represent a Principal-led RFQ protocol for institutional digital asset derivatives. This visualizes high-fidelity execution, price discovery, and block trade aggregation within a robust market microstructure, ensuring atomic settlement and capital efficiency via a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/principal-led-digital-asset-rfq-execution-system-microstructure.jpg)

## Order Routing

Meaning ▴ Order Routing is the automated process by which a trading order is directed from its origination point to a specific execution venue or liquidity source. </a><a href="https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A central dark aperture, like a precision matching engine, anchors four intersecting algorithmic pathways. Light-toned planes represent transparent liquidity pools, contrasting with dark teal sections signifying dark pool or latent liquidity](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-9.jpg)

## Rts 28

Meaning ▴ RTS 28 refers to Regulatory Technical Standard 28 under MiFID II, which mandates investment firms and market operators to publish annual reports on the quality of execution of transactions on trading venues and for financial instruments. </a><a href="https://prime.greeks.live/area/principal-trading/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two abstract, segmented forms intersect, representing dynamic RFQ protocol interactions and price discovery mechanisms. The layered structures symbolize liquidity aggregation across multi-leg spreads within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-microstructure.jpg)

## Principal Trading

Meaning ▴ Principal Trading defines the operational paradigm where a financial entity engages in market transactions utilizing its own capital and balance sheet, rather than executing orders on behalf of clients. </a><a href="https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An institutional-grade platform's RFQ protocol interface, with a price discovery engine and precision guides, enables high-fidelity execution for digital asset derivatives. Integrated controls optimize market microstructure and liquidity aggregation within a Principal's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/proprietary-institutional-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-granular-market-microstructure-analysis-for-prime-os.jpg)

## Rts 27

Meaning ▴ RTS 27 mandates that investment firms and market operators publish detailed data on the quality of execution of transactions on their venues. </a>

**Tags:** [Smart Order Routing](https://options.greeks.live/area/smart-order-routing/), [Systematic Internaliser](https://options.greeks.live/area/systematic-internaliser/), [Principal Trading](https://options.greeks.live/area/principal-trading/), [RTS 28](https://options.greeks.live/area/rts-28/), [Best Execution](https://options.greeks.live/area/best-execution/), [Agency Trading](https://options.greeks.live/area/agency-trading/)	

## Discover More

- 
### [What Are the Key Differences between US and EU Best Execution Requirements for RFQs?](https://options.greeks.live/question/what-are-the-key-differences-between-us-and-eu-best-execution-requirements-for-rfqs/)
![A sleek, disc-shaped system, with concentric rings and a central dome, visually represents an advanced Principal's operational framework. It integrates RFQ protocols for institutional digital asset derivatives, facilitating liquidity aggregation, high-fidelity execution, and real-time risk management. A visible sensor highlights market microstructure insights and price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-engine-digital-asset-derivatives-execution.jpg)

US and EU RFQ best execution diverges on the EU's mandate for continuous, data-intensive proof versus the US's focus on periodic, justifiable review.

- 
### [How Does MiFID II Differ from Regulation NMS in Defining Best Execution?](https://options.greeks.live/question/how-does-mifid-ii-differ-from-regulation-nms-in-defining-best-execution/)
![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. This intelligence layer optimizes price discovery, managing portfolio margin and ensuring best execution in market microstructure.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-core-engine-for-best-execution.jpg)

MiFID II mandates a qualitative, process-driven framework for best outcome, while Reg NMS prioritizes price-centric, quantitative execution.

- 
### [How Does MiFID II’s Best Execution Policy Impact the Use of Anonymous RFQs?](https://options.greeks.live/question/how-does-mifid-iis-best-execution-policy-impact-the-use-of-anonymous-rfqs/)
![An intricate, high-precision mechanism symbolizes an Institutional Digital Asset Derivatives RFQ protocol. Its sleek off-white casing protects the core market microstructure, while the teal-edged component signifies high-fidelity execution and optimal price discovery. A detailed circular dial suggests real-time implied volatility and quantitative analysis for portfolio margin.](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-market-microstructure-optimization.jpg)

MiFID II mandates that anonymous RFQs be integrated into a data-rich, auditable framework, transforming them from discreet tools into fully accountable execution venues.

- 
### [How Does the Rfq Process Contribute to Demonstrating Best Execution under Mifid Ii?](https://options.greeks.live/question/how-does-the-rfq-process-contribute-to-demonstrating-best-execution-under-mifid-ii/)
![Transparent geometric forms symbolize high-fidelity execution and price discovery across market microstructure. A teal element signifies dynamic liquidity pools for digital asset derivatives. An opaque dome embodies principal's capital for private quotation and portfolio margin, depicting RFQ protocols on a Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-for-institutional-digital-asset-derivatives-1.jpg)

The RFQ process provides a structured, competitive, and auditable data trail for demonstrating best execution under MiFID II.

- 
### [What Regulatory Frameworks Govern Smart Order Routing and Best Execution Practices?](https://options.greeks.live/question/what-regulatory-frameworks-govern-smart-order-routing-and-best-execution-practices/)
![A refined object featuring a translucent teal element, symbolizing a dynamic RFQ for Institutional Grade Digital Asset Derivatives. Its precision embodies High-Fidelity Execution and seamless Price Discovery within complex Market Microstructure. The reflective surface suggests deep Liquidity Pool access for Block Trade and Private Quotation protocols.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-precision-for-optimal-execution-and-deep-liquidity-aggregation.jpg)

Regulatory frameworks provide the architectural blueprint for best execution, with smart order routing as the dynamic system that translates fiduciary duty into optimal market access.

- 
### [What Are the Core Differences between FINRA and MiFID II Best Execution Standards?](https://options.greeks.live/question/what-are-the-core-differences-between-finra-and-mifid-ii-best-execution-standards/)
![Precisely engineered circular beige, grey, and blue modules stack tilted on a dark base. A central aperture signifies the core RFQ protocol engine. This embodies a Prime RFQ facilitating high-fidelity execution for institutional digital asset derivatives, optimizing liquidity pool aggregation, multi-leg spread pricing, and robust price discovery in market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/core-prime-os-rfq-engine-digital-asset-derivatives-trading-system-execution.jpg)

FINRA's "reasonable diligence" and MiFID II's "all sufficient steps" define divergent paths to ensuring optimal client outcomes.

- 
### [How Does MiFID II Influence RFQ Best Execution Requirements in Europe?](https://options.greeks.live/question/how-does-mifid-ii-influence-rfq-best-execution-requirements-in-europe/)
![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. It embodies precise price discovery, multi-leg spread processing, and atomic settlement within a Prime RFQ framework.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-options-rfq-liquidity-aggregation-interface.jpg)

MiFID II transforms RFQ best execution from a relationship-based art into a data-driven, auditable science of systemic process.

- 
### [How Do MiFID II and Regulation NMS Define the Best Execution Obligations for Investment Firms?](https://options.greeks.live/question/how-do-mifid-ii-and-regulation-nms-define-the-best-execution-obligations-for-investment-firms/)
![Sleek, engineered components depict an institutional-grade Execution Management System. The prominent dark structure represents high-fidelity execution of digital asset derivatives. Behind it, sweeping forms illustrate latent liquidity and price discovery within a dark pool. The distinct green plane signifies atomic settlement and capital efficiency via RFQ protocols.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-for-optimized-price-discovery-high-fidelity-execution-and-market-microstructure.jpg)

MiFID II and Reg NMS define best execution as distinct architectures one requires a holistic process, the other a price-centric outcome.

- 
### [How Do Regulations like MiFID II Define Best Execution for Order Routing?](https://options.greeks.live/question/how-do-regulations-like-mifid-ii-define-best-execution-for-order-routing/)
![A precise metallic central hub with sharp, grey angular blades signifies high-fidelity execution and smart order routing. Intersecting transparent teal planes represent layered liquidity pools and multi-leg spread structures, illustrating complex market microstructure for efficient price discovery within institutional digital asset derivatives RFQ protocols.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-for-high-fidelity-execution-across-market-microstructure-dynamics.jpg)

MiFID II defines best execution as a verifiable system for achieving the best overall outcome for clients.

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---

**Original URL:** https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-obligations-between-an-si-and-a-traditional-broker/
