# What Are the Key Differences in Best Execution Obligations for RFQs under MiFID I Vs MiFID II? ▴ Question

**Published:** 2025-08-05
**Categories:** Question

---

![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)

![A precise RFQ engine extends into an institutional digital asset liquidity pool, symbolizing high-fidelity execution and advanced price discovery within complex market microstructure. This embodies a Principal's operational framework for multi-leg spread strategies and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-engine-interfacing-core-liquidity-system.jpg)

## Concept

The transition from MiFID I to MiFID II represented a fundamental architectural redesign of the regulatory expectations for proving [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), particularly for bilateral trading protocols like the [Request for Quote](https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) system. The initial framework under MiFID I approached best execution as a principle to be acknowledged, documented primarily through a high-level policy. For RFQs, this often translated into a qualitative assessment, where a firm’s obligation was satisfied by demonstrating it had a reasonable process in place. The core assumption was that a professional client engaging in an RFQ process possessed the sophistication to assess the fairness of a quote, placing a significant portion of the due diligence burden on the client themselves.

This was codified through the “legitimate reliance test,” a four-part assessment to determine if a client was truly depending on the firm to protect its interests. In practice, this created a compliance environment where the existence of a policy was often conflated with the delivery of an optimal outcome.

[MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) dismantled this paradigm entirely. It shifted the locus of responsibility squarely onto the investment firm, transforming the best execution obligation from a procedural acknowledgment into a continuous, data-driven, and demonstrable mandate. The regulation stipulated that dealing on own account, the typical mode for [RFQ](https://prime.greeks.live/area/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) responses, is considered the execution of a client order and is therefore subject to the full weight of best execution requirements. This eliminated the ambiguity of the “legitimate reliance” concept for professional clients and established a uniform, high standard.

The directive now compels firms to take “all sufficient steps” to secure the best possible result, a subtle but powerful change from MiFID I’s “all reasonable steps.” This linguistic adjustment signals a move from process-oriented compliance to outcome-oriented accountability. The new architecture requires firms not just to have a policy, but to build a system of record-keeping and analysis capable of proving, with quantitative evidence, that each execution decision was optimized across a range of competing factors.

![A central, metallic, multi-bladed mechanism, symbolizing a core execution engine or RFQ hub, emits luminous teal data streams. These streams traverse through fragmented, transparent structures, representing dynamic market microstructure, high-fidelity price discovery, and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/principal-grade-digital-asset-derivatives-rfq-protocol-engine-facilitating-high-fidelity-execution-and-optimal-price-discovery-across-fragmented-market-microstructure.jpg)

![Sleek metallic components with teal luminescence precisely intersect, symbolizing an institutional-grade Prime RFQ. This represents multi-leg spread execution for digital asset derivatives via RFQ protocols, ensuring high-fidelity execution, optimal price discovery, and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-best-execution-system.jpg)

## Strategy

The strategic recalibration required by MiFID II for RFQ workflows was profound, forcing a systemic overhaul of how firms approach [liquidity sourcing](https://prime.greeks.live/area/liquidity-sourcing/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), counterparty assessment, and trade documentation. Under MiFID I, the strategy was comparatively straightforward. A firm’s [execution policy](https://prime.greeks.live/area/execution-policy/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) would list potential counterparties, and the act of polling a subset of them for a quote was often sufficient to meet the obligation.

The strategic focus was on maintaining relationships with a known group of [liquidity providers](https://prime.greeks.live/area/liquidity-providers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The underlying assumption was that competitive tension among these providers would naturally lead to a fair price.

> The shift to MiFID II mandated that firms move from a relationship-based model of execution to an evidence-based one.

MiFID II rendered this approach inadequate. The mandate to take “all sufficient steps” necessitated a more dynamic and justifiable strategy for every single RFQ. This involves a much deeper and more formalized approach to selecting which dealers to include in an RFQ and, critically, a documented rationale for the final execution decision. A modern execution strategy must now be built on a foundation of data, both pre-trade and post-trade, to defend its effectiveness.

![A polished, abstract geometric form represents a dynamic RFQ Protocol for institutional-grade digital asset derivatives. A central liquidity pool is surrounded by opening market segments, revealing an emerging arm displaying high-fidelity execution data](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-institutional-digital-asset-derivatives-rfq-protocol-system.jpg)

## How Did the Execution Factors Evolve?

The core execution factors themselves did not change between the two regimes, but their application and the requirement to prove their consideration did. MiFID I required firms to take into account price, costs, speed, likelihood of execution, and other relevant considerations. MiFID II upholds these same factors but demands a more rigorous and transparent weighting system. The firm’s execution policy must now clearly explain the relative importance it assigns to each factor for different instrument classes and client types.

For RFQs in liquid instruments, price and cost are paramount. For illiquid or complex instruments, the likelihood of execution and settlement might justifiably take precedence. The strategic challenge is to create a policy that is both specific enough to be compliant and flexible enough to handle diverse market conditions.

This table illustrates the strategic shift in applying these factors to an RFQ process.

### Table 1 ▴ Strategic Application of Execution Factors in RFQs

| Execution Factor | MiFID I Strategic Approach | MiFID II Strategic Approach |
| --- | --- | --- |
| Price | Obtain competitive quotes from a standard list of counterparties. The best price offered from the polled group was generally considered sufficient. | Obtain quotes and evidence that the final price was fair relative to available market data. This may involve checking against consolidated tape providers or other independent pricing sources, even for OTC instruments. |
| Costs | Implicitly considered within the net price. Explicit cost analysis was not a primary focus. | Total consideration is the mandated metric. All explicit and implicit costs must be calculated and disclosed, forming part of the total cost analysis (TCA). |
| Speed of Execution | Generally not a primary driver for RFQ, but timeliness was a consideration. | The time of the RFQ, the time of each response, and the time of execution must be timestamped to the microsecond. This data is used to analyze dealer performance and market impact. |
| Likelihood of Execution | Assessed based on past relationships and the perceived reliability of the counterparty. | Quantitatively tracked. Firms must monitor counterparty response rates, fill rates, and any instances of backing away from a quote. This data informs which dealers are included in future RFQs. |
| Counterparty Selection | Based on a relatively static list of approved liquidity providers. | A dynamic and monitored process. The execution policy must detail the criteria for selecting venues and counterparties, and this selection must be reviewed at least annually based on performance data (RTS 28 reports). |

![Abstract intersecting blades in varied textures depict institutional digital asset derivatives. These forms symbolize sophisticated RFQ protocol streams enabling multi-leg spread execution across aggregated liquidity](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-driven-digital-asset-derivatives-rfq-protocol-execution.jpg)

## Systemic Adjustments to Trading Protocols

The strategic response to MiFID II has involved significant investment in technology and data management systems. Firms have had to develop or procure systems capable of the following:

- **Systematic RFQ Management** ▴ Automating the process of sending RFQs to a chosen set of dealers, capturing all responses electronically, and recording the final execution details.

- **Pre-Trade Analytics** ▴ Integrating real-time market data feeds to benchmark incoming quotes against, providing traders with an objective measure of fairness before execution.

- **Post-Trade [TCA](https://prime.greeks.live/area/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)** ▴ Building robust [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) models that can evaluate RFQ executions against various benchmarks, comparing the performance of different liquidity providers over time.

- **Compliance Reporting** ▴ Automating the data aggregation and formatting required for regulatory reports like [RTS 27](https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (from venues) and [RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (from firms), which publicize execution quality metrics.

![Abstract spheres on a fulcrum symbolize Institutional Digital Asset Derivatives RFQ protocol. A small white sphere represents a multi-leg spread, balanced by a large reflective blue sphere for block trades](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-dynamic-balance-for-optimal-high-fidelity-execution.jpg)

![Two high-gloss, white cylindrical execution channels with dark, circular apertures and secure bolted flanges, representing robust institutional-grade infrastructure for digital asset derivatives. These conduits facilitate precise RFQ protocols, ensuring optimal liquidity aggregation and high-fidelity execution within a proprietary Prime RFQ environment](https://options.greeks.live/wp-content/uploads/2025/08/institutional-grade-execution-channels-enabling-private-quotation-and-optimal-liquidity-aggregation-for-high-fidelity-digital-asset-derivatives-rfq-protocols-on-prime-os.jpg)

## Execution

The execution of an RFQ [under MiFID](https://prime.greeks.live/question/what-are-the-operational-consequences-of-misreporting-under-mifid-ii-versus-a-reporting-failure-under-emir/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) II is a high-fidelity process that demands a robust operational and technological architecture. The abstract requirement to achieve the best possible result is translated into a concrete series of operational steps, each generating a trail of evidence. The entire workflow is designed around the principle of demonstrable compliance, where every decision point is recorded and justifiable through quantitative data. This stands in stark contrast to the MiFID I era, where the execution process was less formalized and relied more heavily on the trader’s professional judgment without the same burden of proof.

> Under MiFID II, the operational focus for RFQs shifted from simply getting a deal done to building a defensible audit trail for every transaction.

![A precision optical system with a reflective lens embodies the Prime RFQ intelligence layer. Gray and green planes represent divergent RFQ protocols or multi-leg spread strategies for institutional digital asset derivatives, enabling high-fidelity execution and optimal price discovery within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-intelligent-core-driving-digital-asset-derivatives-rfq-protocols-high-fidelity-execution-across-diverse-liquidity-pools-for-optimal-price-discovery.jpg)

## The Operational Playbook for a MiFID II Compliant RFQ

Executing a single RFQ under the current regime involves a detailed, multi-stage procedure. This operational playbook outlines the critical steps an investment firm must follow to ensure compliance.

- **Pre-Trade Diligence and Counterparty Selection** ▴ Before an RFQ is even initiated, the system must draw from a pool of approved liquidity providers. This pool is not static; it is continuously vetted based on the firm’s annual review of execution quality data (informed by RTS 28 reports). For a specific trade, the trader or algorithm selects a minimum number of counterparties (often three or more) to ensure competitive tension. The rationale for this selection, especially if it deviates from a standard list, must be recordable.

- **RFQ Initiation and Data Capture** ▴ The RFQ is sent electronically. The system must capture the exact timestamp of initiation, the instrument details, the quantity, and the list of recipients.

- **Response Monitoring and Benchmarking** ▴ As quotes arrive from liquidity providers, they are logged with precise timestamps. A compliant execution system will simultaneously display these quotes alongside a real-time, independent market benchmark where possible. For an OTC derivative, this might be a calculated price based on the underlying asset’s market price and relevant volatility data. This provides the trader with an immediate, objective context for the fairness of the prices offered.

- **Execution and Rationale Logging** ▴ The trader selects a quote for execution. The system records the timestamp of this decision. Crucially, if the selected quote is not the one with the best price, the system must require the trader to provide a justification from a predefined list of reasons (e.g. better settlement likelihood, larger available size, lower market impact). This structured rationale is a critical piece of the audit trail.

- **Post-Trade Analysis and Record Keeping** ▴ After execution, the trade data is fed into the firm’s TCA system. The execution price is compared against various benchmarks (e.g. arrival price, volume-weighted average price over a period) to calculate performance metrics. All records related to the trade ▴ the RFQ, all quotes received, the execution record, and the justification ▴ must be stored for a minimum of five years.

![Precision-engineered modular components display a central control, data input panel, and numerical values on cylindrical elements. This signifies an institutional Prime RFQ for digital asset derivatives, enabling RFQ protocol aggregation, high-fidelity execution, algorithmic price discovery, and volatility surface calibration for portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/firm-fx-options-rfq-trade-system-key-microstructure-data-flow-core-engine.jpg)

## Quantitative Modeling and Data Analysis

The core of MiFID II execution is the quantitative proof of diligence. This is most clearly seen in the post-trade TCA process. The table below presents a hypothetical TCA for an RFQ to buy a corporate bond, demonstrating the level of detail required.

### Table 2 ▴ Hypothetical Transaction Cost Analysis for a Corporate Bond RFQ

| Metric | Dealer A | Dealer B | Dealer C (Executed) | Market Benchmark |
| --- | --- | --- | --- | --- |
| Quote Timestamp | 14:30:01.125Z | 14:30:01.342Z | 14:30:01.218Z | N/A |
| Quoted Price (Offer) | 99.55 | 99.52 | 99.53 | N/A |
| Execution Price | N/A | N/A | 99.53 | N/A |
| Arrival Price Benchmark | 99.50 | 99.50 | 99.50 | 99.50 |
| Slippage (bps) | N/A | N/A | +3 bps | N/A |
| Reason for Selection | N/A | Price was best, but dealer has a history of failed settlements for this bond class. | Selected for high certainty of execution and settlement, justifying the 1 basis point price difference from the best quote. | N/A |

This analysis demonstrates that while Dealer B offered a marginally better price, the execution decision with Dealer C was based on another valid execution factor ▴ the likelihood of execution and settlement. Under MiFID II, having this data and the accompanying rationale logged is what constitutes a compliant execution process.

![A futuristic metallic optical system, featuring a sharp, blade-like component, symbolizes an institutional-grade platform. It enables high-fidelity execution of digital asset derivatives, optimizing market microstructure via precise RFQ protocols, ensuring efficient price discovery and robust portfolio margin](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-prime-os-for-high-fidelity-rfq-execution-and-optimal-price-discovery.jpg)

## What Is the True Purpose of Public Reporting?

The reporting obligations under RTS 27 and RTS 28 serve a dual purpose. Internally, they force firms to collect and analyze the data necessary to improve their own execution processes. Externally, they create a market-wide feedback loop. By publishing reports on their top five execution venues (RTS 28), firms provide clients and regulators with transparency into their routing decisions.

This public disclosure creates competitive pressure on both firms and the venues they use, as underperformance becomes visible to the entire market. For the RFQ process, this means liquidity providers who consistently offer poor pricing or unreliable execution risk being dropped from firms’ routing policies, a powerful incentive to maintain high standards.

![Interlocking transparent and opaque geometric planes on a dark surface. This abstract form visually articulates the intricate Market Microstructure of Institutional Digital Asset Derivatives, embodying High-Fidelity Execution through advanced RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/geometric-abstraction-of-institutional-digital-asset-derivatives-market-microstructure-driving-high-fidelity-execution-via-principal-rfq-protocols-and-optimal-liquidity-aggregation.jpg)

## References

- European Commission. “Commission Delegated Regulation (EU) 2017/565 of 25 April 2016 supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive.” Official Journal of the European Union, 2017.

- European Parliament and Council. “Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU.” Official Journal of the European Union, 2014.

- Financial Conduct Authority. “Markets in Financial Instruments Directive II Implementation ▴ Policy Statement II.” PS17/14, July 2017.

- Kennedy, Tom. “Best Execution Under MiFID II.” Thomson Reuters, June 2017.

- Swedish Securities Dealers Association. “Guide for drafting/review of Execution Policy under MiFID II.” 2018.

- ICMA. “MiFID II/MiFIR ▴ Transparency & Best Execution requirements in respect of bonds.” Q1 2016.

- Autorité des Marchés Financiers (AMF). “Guide to best execution.” 2019.

- BofA Securities. “Order Execution Policy.” 2022.

![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)

## Reflection

The evolution from MiFID I to MiFID II was an architectural upgrade to the market’s operating system, compelling a move from subjective processes to objective, data-centric proof. The obligations surrounding the RFQ protocol are a clear manifestation of this. The systems you build, the data you capture, and the analytical rigor you apply are no longer ancillary functions supporting the trading desk. They are the very foundation upon which your claim to providing best execution rests.

The question for any institution is therefore not whether its policies meet the letter of the regulation, but whether its execution architecture is sufficiently robust to defend every single trading decision with irrefutable, quantitative evidence. How does your current infrastructure measure up to this systemic demand for proof?

![A teal and white sphere precariously balanced on a light grey bar, itself resting on an angular base, depicts market microstructure at a critical price discovery point. This visualizes high-fidelity execution of digital asset derivatives via RFQ protocols, emphasizing capital efficiency and risk aggregation within a Principal trading desk's operational framework](https://options.greeks.live/wp-content/uploads/2025/07/precision-institutional-digital-asset-derivatives-rfq-execution-strategy.jpg)

## Glossary

<a href="https://prime.greeks.live/area/request-for-quote/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![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](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-precision-for-optimal-execution-and-deep-liquidity-aggregation.jpg)

## Request for Quote

Meaning ▴ A Request for Quote, or RFQ, constitutes a formal communication initiated by a potential buyer or seller to solicit price quotations for a specified financial instrument or block of instruments from one or more liquidity providers. </a><a href="https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision digital token, subtly green with a '0' marker, meticulously engages a sleek, white institutional-grade platform. This symbolizes secure RFQ protocol initiation for high-fidelity execution of complex multi-leg spread strategies, optimizing portfolio margin and capital efficiency within a Principal's Crypto Derivatives OS](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-platform-secure-rfq-protocol-initiation-for-optimal-block-trade-execution.jpg)

## 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/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A symmetrical, high-tech digital infrastructure depicts an institutional-grade RFQ execution hub. Luminous conduits represent aggregated liquidity for digital asset derivatives, enabling high-fidelity execution and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-system.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/rfq/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Polished metallic disks, resembling data platters, with a precise mechanical arm poised for high-fidelity execution. This embodies an institutional digital asset derivatives platform, optimizing RFQ protocol for efficient price discovery, managing market microstructure, and leveraging a Prime RFQ intelligence layer to minimize execution latency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-precision-execution-via-advanced-rfq-protocols-and-prime-os-intelligence-layer-for-optimal-market-microstructure.jpg)

## Rfq

Meaning ▴ Request for Quote (RFQ) is a structured communication protocol enabling a market participant to solicit executable price quotations for a specific instrument and quantity from a selected group of liquidity providers. </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">
![A sleek, futuristic mechanism showcases a large reflective blue dome with intricate internal gears, connected by precise metallic bars to a smaller sphere. This embodies an institutional-grade Crypto Derivatives OS, optimizing RFQ protocols for high-fidelity execution, managing liquidity pools, and enabling efficient price discovery](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-facilitating-high-fidelity-execution-and-optimal-market-microstructure-with-prime-os-intelligence.jpg)

## 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/execution-policy/?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)

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

## Liquidity Providers

Meaning ▴ Liquidity Providers are market participants, typically institutional entities or sophisticated trading firms, that facilitate efficient market operations by continuously quoting bid and offer prices for financial instruments. </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 sophisticated system's core component, representing an Execution Management System, drives a precise, luminous RFQ protocol beam. This beam navigates between balanced spheres symbolizing counterparties and intricate market microstructure, facilitating institutional digital asset derivatives trading, optimizing price discovery, and ensuring high-fidelity execution within a prime brokerage framework](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-engine-10.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/tca/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision instrument featuring a sharp, translucent teal blade from a geared base on a textured platform. This symbolizes high-fidelity execution of institutional digital asset derivatives via RFQ protocols, optimizing market microstructure for capital efficiency and algorithmic trading on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-algorithmic-execution-infrastructure-for-institutional-digital-asset-derivatives-request-for-quote-protocols-optimal-liquidity.jpg)

## Tca

Meaning ▴ Transaction Cost Analysis (TCA) represents a quantitative methodology designed to evaluate the explicit and implicit costs incurred during the execution of financial trades. </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">
![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)

## Rts 27

Meaning ▴ RTS 27 mandates that investment firms and market operators publish detailed data on the quality of execution of transactions on their venues. </a><a href="https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A precision-engineered metallic institutional trading platform, bisected by an execution pathway, features a central blue RFQ protocol engine. This Crypto Derivatives OS core facilitates high-fidelity execution, optimal price discovery, and multi-leg spread trading, reflecting advanced market microstructure](https://options.greeks.live/wp-content/uploads/2025/08/precision-engineered-institutional-digital-asset-derivatives-execution-core-facilitating-rfq-protocol-driven-optimal-price-discovery-and-multi-leg-spread-trading-for-capital-efficiency.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/question/what-are-the-operational-consequences-of-misreporting-under-mifid-ii-versus-a-reporting-failure-under-emir/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A dark blue sphere and teal-hued circular elements on a segmented surface, bisected by a diagonal line. This visualizes institutional block trade aggregation, algorithmic price discovery, and high-fidelity execution within a Principal's Prime RFQ, optimizing capital efficiency and mitigating counterparty risk for digital asset derivatives and multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/market-microstructure-driven-institutional-digital-asset-derivatives-rfq.jpg)

## Under Mifid

A MiFID II misreport corrupts market surveillance data; an EMIR failure hides systemic risk, creating distinct operational and reputational threats. </a>

**Tags:** [Best Execution](https://options.greeks.live/area/best-execution/), [MiFID II](https://options.greeks.live/area/mifid-ii/), [RFQ](https://options.greeks.live/area/rfq/), [Order Execution](https://options.greeks.live/area/order-execution/), [Transaction Cost Analysis](https://options.greeks.live/area/transaction-cost-analysis/), [Request for Quote](https://options.greeks.live/area/request-for-quote/)	

## Discover More

- 
### [How Does MiFID II Influence RFQ Data Governance and Best Execution Requirements?](https://options.greeks.live/question/how-does-mifid-ii-influence-rfq-data-governance-and-best-execution-requirements/)
![A sleek, metallic mechanism symbolizes an advanced institutional trading system. The central sphere represents aggregated liquidity and precise price discovery. Its metallic arm signifies an algorithmic trading engine, facilitating high-fidelity execution for digital asset derivatives, with intricate base circuitry depicting optimized RFQ protocols and robust market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-engine-for-optimal-price-discovery-and-best-execution.jpg)

MiFID II mandates that RFQ protocols evolve into fully auditable, data-driven systems to prove best execution for clients.

- 
### [How Does the Concept of Best Execution Apply to Illiquid or Bespoke Financial Instruments?](https://options.greeks.live/question/how-does-the-concept-of-best-execution-apply-to-illiquid-or-bespoke-financial-instruments/)
![Sleek metallic and translucent teal forms intersect, representing institutional digital asset derivatives and high-fidelity execution. Concentric rings symbolize dynamic volatility surfaces and deep liquidity pools. This visualizes advanced RFQ protocols, complex market microstructure, and quantitative analysis within a Prime RFQ for capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/optimized-institutional-digital-asset-derivatives-rfq-protocols-microstructure.jpg)

Best execution for illiquid assets is a systematic process of proving fairness through structured price discovery and rigorous documentation.

- 
### [How Does MiFID II Define All Sufficient Steps for Best Execution?](https://options.greeks.live/question/how-does-mifid-ii-define-all-sufficient-steps-for-best-execution/)
![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)

MiFID II defines all sufficient steps as building a dynamic, evidence-based system to demonstrably achieve the best client outcome.

- 
### [How Has MiFID II Specifically Altered Best Execution Requirements for Fixed Income RFQs?](https://options.greeks.live/question/how-has-mifid-ii-specifically-altered-best-execution-requirements-for-fixed-income-rfqs/)
![An intricate, transparent cylindrical system depicts a sophisticated RFQ protocol for digital asset derivatives. Internal glowing elements signify high-fidelity execution and algorithmic trading. A central angular structure represents atomic settlement and multi-leg spread capabilities, ensuring best execution within institutional trading.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-architecture.jpg)

MiFID II transformed fixed income RFQ best execution from a qualitative duty into a quantitatively provable, data-driven process.

- 
### [How Do the Principles of Best Execution Differ between US Rule 606 and MiFID II’s Framework?](https://options.greeks.live/question/how-do-the-principles-of-best-execution-differ-between-us-rule-606-and-mifid-iis-framework/)
![A sleek, illuminated control knob emerges from a robust, metallic base, representing a Prime RFQ interface for institutional digital asset derivatives. Its glowing bands signify real-time analytics and high-fidelity execution of RFQ protocols, enabling optimal price discovery and capital efficiency in dark pools for block trades.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-for-optimal-execution.jpg)

US Rule 606 mandates disclosure of order routing conflicts, while MiFID II requires firms to build and prove a superior execution process.

- 
### [How Does MiFID II Influence the Use of RFQs in European Equity Markets?](https://options.greeks.live/question/how-does-mifid-ii-influence-the-use-of-rfqs-in-european-equity-markets/)
![A fractured, polished disc with a central, sharp conical element symbolizes fragmented digital asset liquidity. This Principal RFQ engine ensures high-fidelity execution, precise price discovery, and atomic settlement within complex market microstructure, optimizing capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-engine-unifying-fragmented-digital-asset-derivatives-liquidity-for-best-execution.jpg)

MiFID II transformed the RFQ into a core mechanism for proving best execution and accessing fragmented liquidity in a compliant, data-rich way.

- 
### [What Are the Key Differences in the Audit Trail between an Algorithmic and an Rfq Execution?](https://options.greeks.live/question/what-are-the-key-differences-in-the-audit-trail-between-an-algorithmic-and-an-rfq-execution/)
![Two high-gloss, white cylindrical execution channels with dark, circular apertures and secure bolted flanges, representing robust institutional-grade infrastructure for digital asset derivatives. These conduits facilitate precise RFQ protocols, ensuring optimal liquidity aggregation and high-fidelity execution within a proprietary Prime RFQ environment.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-grade-execution-channels-enabling-private-quotation-and-optimal-liquidity-aggregation-for-high-fidelity-digital-asset-derivatives-rfq-protocols-on-prime-os.jpg)

An algorithmic audit trail reconstructs a machine's high-frequency logic, while an RFQ trail documents a discrete human negotiation.

- 
### [What Is the Regulatory Impact of MiFID II on RFQ Best Execution Policies?](https://options.greeks.live/question/what-is-the-regulatory-impact-of-mifid-ii-on-rfq-best-execution-policies/)
![Transparent conduits and metallic components abstractly depict institutional digital asset derivatives trading. Symbolizing cross-protocol RFQ execution, multi-leg spreads, and high-fidelity atomic settlement across aggregated liquidity pools, it reflects prime brokerage infrastructure.](https://options.greeks.live/wp-content/uploads/2025/07/cross-protocol-rfq-execution-digital-asset-derivatives-microstructure-system.jpg)

MiFID II mandates a data-driven, auditable framework for RFQ best execution, transforming it into a quantifiable process.

- 
### [How Do Electronic RFQ Platforms Enhance Best Execution Compliance?](https://options.greeks.live/question/how-do-electronic-rfq-platforms-enhance-best-execution-compliance/)
![A robust circular Prime RFQ component with horizontal data channels, radiating a turquoise glow signifying price discovery. This institutional-grade RFQ system facilitates high-fidelity execution for digital asset derivatives, optimizing market microstructure and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-rfq-engine-for-digital-asset-derivatives-execution.jpg)

Electronic RFQ platforms enhance best execution compliance by creating a definitive, auditable record of competitive price discovery in a controlled environment.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "What Are the Key Differences in Best Execution Obligations for RFQs under MiFID I Vs MiFID II?",
            "item": "https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-obligations-for-rfqs-under-mifid-i-vs-mifid-ii/"
        }
    ]
}
```

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

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-obligations-for-rfqs-under-mifid-i-vs-mifid-ii/"
    },
    "headline": "What Are the Key Differences in Best Execution Obligations for RFQs under MiFID I Vs MiFID II? \u25b4 Question",
    "description": "MiFID II transformed RFQ best execution from a procedural policy into a data-driven, provable mandate for optimal outcomes. \u25b4 Question",
    "url": "https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-obligations-for-rfqs-under-mifid-i-vs-mifid-ii/",
    "datePublished": "2025-08-05T23:02:05+00:00",
    "dateModified": "2025-08-05T23:02:06+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimal-execution-1.jpg",
        "caption": "A sleek, spherical, off-white device with a glowing cyan lens and dark blue base section embodies a sophisticated Crypto Derivatives OS. This Institutional Grade system is engineered for High-Fidelity Execution of Digital Asset Derivatives, including Bitcoin Options and Ethereum Futures. It leverages advanced RFQ Protocols for Optimal Liquidity Aggregation, driving Price Discovery via Market Microstructure Analysis. The system minimizes Slippage and Latency, ensuring Best Execution and Portfolio Margin."
    },
    "keywords": [
        "Best Execution",
        "Cost Analysis",
        "Execution Policy",
        "Liquidity Providers",
        "Liquidity Sourcing",
        "Market Microstructure",
        "MiFID II",
        "Order Execution",
        "Regulatory Compliance",
        "Request for Quote",
        "RFQ",
        "RTS 27",
        "RTS 28",
        "TCA",
        "Transaction Cost Analysis"
    ]
}
```

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

```json
{
    "@context": "https://schema.org",
    "@type": "FAQPage",
    "mainEntity": [
        {
            "@type": "Question",
            "name": "How Did The Execution Factors Evolve?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The core execution factors themselves did not change between the two regimes, but their application and the requirement to prove their consideration did. MiFID I required firms to take into account price, costs, speed, likelihood of execution, and other relevant considerations. MiFID II upholds these same factors but demands a more rigorous and transparent weighting system. The firm's execution policy must now clearly explain the relative importance it assigns to each factor for different instrument classes and client types. For RFQs in liquid instruments, price and cost are paramount. For illiquid or complex instruments, the likelihood of execution and settlement might justifiably take precedence. The strategic challenge is to create a policy that is both specific enough to be compliant and flexible enough to handle diverse market conditions."
            }
        },
        {
            "@type": "Question",
            "name": "What Is The True Purpose Of Public Reporting?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The reporting obligations under RTS 27 and RTS 28 serve a dual purpose. Internally, they force firms to collect and analyze the data necessary to improve their own execution processes. Externally, they create a market-wide feedback loop. By publishing reports on their top five execution venues (RTS 28), firms provide clients and regulators with transparency into their routing decisions. This public disclosure creates competitive pressure on both firms and the venues they use, as underperformance becomes visible to the entire market. For the RFQ process, this means liquidity providers who consistently offer poor pricing or unreliable execution risk being dropped from firms' routing policies, a powerful incentive to maintain high standards."
            }
        }
    ]
}
```


---

**Original URL:** https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-obligations-for-rfqs-under-mifid-i-vs-mifid-ii/
