# What Are the Regulatory Implications of Fully Automating Best Execution under MiFID II? ▴ Question

**Published:** 2025-08-09
**Categories:** Question

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## Concept

The Markets in Financial Instruments Directive II ([MiFID II](https://prime.greeks.live/area/mifid-ii/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite)) fundamentally redefined the principle of [best execution](https://prime.greeks.live/area/best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), shifting it from a qualitative objective to a quantitative, evidence-based discipline. Prior to this directive, firms were obligated to take “all reasonable steps” to achieve a favorable outcome for their clients. The introduction of MiFID II in 2018, however, mandated a more stringent standard, requiring firms to take “all sufficient steps” to secure the best possible result.

This seemingly subtle change in language represents a profound operational and philosophical transformation. It moved the burden of proof squarely onto the investment firm, demanding a demonstrable and auditable trail of decisions that justify the execution outcome across a spectrum of factors.

Fully automating the best execution process is a direct response to this heightened regulatory demand. The core implication is that subjective, manual decision-making processes are no longer sufficient to meet the evidential requirements of the directive. Regulators now expect a systematic and data-centric approach. Automation provides the means to ingest, process, and analyze vast quantities of market data in real-time, creating a robust framework for compliance.

This is not merely about achieving the best price; the directive explicitly broadens the criteria to include costs, speed, likelihood of execution and settlement, size, and the nature of the order itself. Consequently, an [automated system](https://prime.greeks.live/question/how-can-machine-learning-be-deployed-to-optimize-dealer-selection-in-an-automated-rfq-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) must be designed to weigh these often-competing factors according to the specific characteristics of each client and order, as stipulated in the firm’s [execution policy](https://prime.greeks.live/question/how-should-an-order-execution-policy-balance-the-need-for-information-control-against-the-duty-of-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite).

> The core regulatory implication of automating best execution is the transformation of a compliance duty into a data-driven, systematic, and continuously auditable process.

This transition introduces a new set of regulatory considerations. The algorithms and logic underpinning the automated system become a primary subject of regulatory scrutiny. Firms must be able to explain and validate the design of their systems, including the data sources used, the weighting of execution factors, and the process for reviewing and updating the system’s logic. The automation itself does not absolve the firm of responsibility; rather, it transfers the focus of compliance from individual trading decisions to the governance and oversight of the automated system.

This includes robust monitoring to detect anomalies, prevent market abuse, and ensure the system consistently operates in the client’s best interest. The regulatory framework, therefore, necessitates a deep integration of technology, data science, and compliance oversight, making the system’s architecture as critical as the trading outcomes it produces.

![A transparent, precisely engineered optical array rests upon a reflective dark surface, symbolizing high-fidelity execution within a Prime RFQ. Beige conduits represent latency-optimized data pipelines facilitating RFQ protocols for digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-system-architecture.jpg)

![A translucent institutional-grade platform reveals its RFQ execution engine with radiating intelligence layer pathways. Central price discovery mechanisms and liquidity pool access points are flanked by pre-trade analytics modules for digital asset derivatives and multi-leg spreads, ensuring high-fidelity execution](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-core-platform.jpg)

## Strategy

Developing a strategic framework for [automated best execution](https://prime.greeks.live/area/automated-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) [under MiFID](https://prime.greeks.live/question/what-are-the-operational-consequences-of-misreporting-under-mifid-ii-versus-a-reporting-failure-under-emir/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) II requires a multi-faceted approach that integrates data management, analytical modeling, and robust governance. The primary objective is to build a system that not only complies with the letter of the regulation but also provides a durable, auditable, and efficient operational advantage. The strategy must address how the firm will systematically capture, process, and act upon the diverse data points necessary to demonstrate that “all sufficient steps” have been taken for every client order.

![A sleek, multi-segmented sphere embodies a Principal's operational framework for institutional digital asset derivatives. Its transparent 'intelligence layer' signifies high-fidelity execution and price discovery via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-digital-asset-derivatives-execution-engine.jpg)

## Data Architecture for Compliance

A successful automation strategy begins with a sophisticated [data architecture](https://prime.greeks.live/area/data-architecture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite). The system must ingest data from multiple sources to provide a comprehensive view of the market at the time of execution. This includes both pre-trade and post-trade data.

- **Pre-Trade Data** ▴ This encompasses all information available before an order is executed. An automated system leverages this data to make informed routing decisions. Key sources include real-time market data feeds from various [execution venues](https://prime.greeks.live/question/how-does-a-best-execution-committee-quantify-and-compare-execution-quality-across-different-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite), data on venue liquidity, and information on fees and clearing costs.

- **Post-Trade Data** ▴ After an order is executed, post-trade data is used for analysis, reporting, and system validation. This includes execution prices, timestamps, volumes, and data from [Transaction Cost Analysis](https://prime.greeks.live/area/transaction-cost-analysis/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TCA) providers. TCA is a vital tool for comparing a firm’s [execution quality](https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) against market benchmarks, although it primarily focuses on price and is only one component of the overall best execution picture. 

The strategic challenge lies in integrating these disparate data sources into a single, coherent framework. This unified data model allows the system to apply the firm’s execution policy consistently and to generate the detailed reports required by regulators, such as the annual [RTS 28](https://prime.greeks.live/area/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) report on the top five execution venues. 

> An effective strategy for automated best execution hinges on a unified data architecture that enables both real-time decision-making and comprehensive post-trade analysis.

![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)

## Analytical Models and Execution Logic

The core of an automated best execution system is its analytical engine. This engine uses algorithms to evaluate the various execution factors and determine the optimal execution strategy for a given order. The design of this logic is a critical strategic decision.

Firms must define how the system will weigh the different execution factors. For example, for a large, illiquid order, the likelihood of execution and potential market impact might be prioritized over speed. For a small, liquid order in a fast-moving market, speed and price might be the most important factors. This logic must be codified into the system’s algorithms and be consistent with the firm’s client classifications and order execution policy. 

![A metallic cylindrical component, suggesting robust Prime RFQ infrastructure, interacts with a luminous teal-blue disc representing a dynamic liquidity pool for digital asset derivatives. A precise golden bar diagonally traverses, symbolizing an RFQ-driven block trade path, enabling high-fidelity execution and atomic settlement within complex market microstructure for institutional grade operations](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-protocols-navigating-digital-asset-derivatives-market-microstructure-for-optimal-block-trade-liquidity.jpg)

## Comparison of Strategic Approaches

Firms can adopt several strategic approaches to building their automated systems, each with different implications for cost, flexibility, and compliance overhead.

### Table 1 ▴ Comparison of strategic approaches for automated best execution systems.

| Approach | Description | Advantages | Challenges |
| --- | --- | --- | --- |
| In-House Development | Building a proprietary system from the ground up. | Full control over logic and functionality; can be tailored to specific business needs. | High initial cost; requires significant in-house expertise; ongoing maintenance burden. |
| Third-Party Vendor Solution | Purchasing a solution from a specialized RegTech provider. | Lower initial cost; leverages vendor expertise; faster implementation. | Less customization; potential for “black box” logic; reliance on vendor for updates. |
| Hybrid Model | Combining a vendor solution for core functions with in-house development for specific analytics or reporting. | Balances cost and control; allows for differentiation in key areas. | Requires careful integration; potential for data silos if not managed properly. |

![A sophisticated mechanical core, split by contrasting illumination, represents an Institutional Digital Asset Derivatives RFQ engine. Its precise concentric mechanisms symbolize High-Fidelity Execution, Market Microstructure optimization, and Algorithmic Trading within a Prime RFQ, enabling optimal Price Discovery and Liquidity Aggregation](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-for-institutional-digital-asset-derivatives-precision-execution.jpg)

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## Execution

The execution of a fully automated best execution framework under MiFID II is a complex undertaking that extends beyond technology deployment into the realms of governance, monitoring, and reporting. A firm’s ability to demonstrate compliance rests on the operational robustness of its systems and the clarity of its oversight processes. The regulatory expectation is that firms can, at any point, provide a detailed justification for their execution outcomes, supported by comprehensive data and a clear audit trail.

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## System Governance and Oversight

A critical component of execution is the establishment of a formal governance framework for the automated system. This framework should define the roles and responsibilities for overseeing the system’s performance and ensuring its continued compliance with regulatory requirements. Key elements of this framework include:

- **Initial Validation** ▴ Before deployment, the system must undergo rigorous testing to ensure it operates as intended and correctly applies the firm’s execution policy. This includes testing the data inputs, the algorithmic logic, and the output of the system against a range of historical and simulated market scenarios.

- **Ongoing Monitoring** ▴ Firms must continuously monitor the effectiveness of their automated arrangements. This involves regular reviews of execution quality reports, analysis of any outliers or anomalies flagged by the system, and assessments of whether the system is consistently delivering the best possible results for clients. This monitoring process should be documented and reviewed by senior management.

- **Annual Review** ▴ MiFID II requires firms to review their order execution policy and arrangements at least annually. This review must assess whether the execution venues included in the policy continue to provide the best possible results or if new venues should be considered. The automated system must be capable of providing the data necessary to support this comprehensive review.

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## Regulatory Reporting and Data Provision

Automation is instrumental in meeting the extensive reporting requirements of MiFID II. The two key reports related to best execution are [RTS 27](https://prime.greeks.live/area/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and RTS 28. An automated system must be designed to capture and format the required data for these reports with minimal manual intervention.

> The operational execution of automated best execution culminates in the ability to produce granular, data-rich regulatory reports that transparently justify the firm’s execution quality.

RTS 28 is a public, annual report where firms summarize the top five execution venues used for each class of financial instrument and provide a qualitative assessment of the execution quality obtained. RTS 27 reports, on the other hand, are published quarterly by the execution venues themselves and provide detailed data on execution quality. Investment firms are expected to use the data from RTS 27 reports as part of their own monitoring and review process.

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## Key Data Fields for RTS 28 Reporting

The following table outlines some of the critical data points that an automated system must capture to facilitate the generation of the RTS 28 report.

### Table 2 ▴ Selected data fields required for RTS 28 reporting.

| Data Field | Description | Automation Implication |
| --- | --- | --- |
| Class of Financial Instrument | Categorization of instruments (e.g. equities, bonds, derivatives). | System must accurately classify every trade. |
| Execution Venue Name and Identifier | The name and unique code of the venue where the trade was executed. | Automated capture of venue data for every executed order. |
| Volume of Client Orders | The total volume of client orders executed on each venue. | Accurate aggregation of order volumes by venue. |
| Number of Client Orders | The total number of client orders executed on each venue. | Precise counting of individual orders routed to each venue. |
| Percentage of Passive/Aggressive Orders | Breakdown of orders that provided liquidity (passive) versus those that took liquidity (aggressive). | System must be able to classify order types based on their interaction with the order book. |

The successful execution of an automated best execution strategy, therefore, is not a one-time project but an ongoing cycle of monitoring, analysis, and refinement. It requires a deep commitment to data quality, technological robustness, and a culture of compliance that permeates the organization from the trading desk to the boardroom.

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## References

- 1. SteelEye. “Best Execution Challenges & Best Practices.” 2021.

- 2. LeapXpert. “MiFID Compliance ▴ Key Regulations and Challenges.” 2025.

- 3. eflow. “Best execution compliance in a global context.” 2025.

- 4. MAP FinTech. “The crucial need for Best Execution Monitoring in today’s regulatory environment.” 2024.

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

- 6. European Securities and Markets Authority. “Questions and Answers on MiFID II and MiFIR investor protection and intermediaries topics.” ESMA70-872942901-38, 2021.

- 7. Financial Conduct Authority. “Best execution or order handling.” FCA Handbook, COBS 11.2, 2023.

- 8. Bares, F. et al. “Best Execution under MiFID II ▴ A plain tale for practitioners.” Journal of Trading, vol. 14, no. 1, 2019, pp. 62-73.

- 9. Gomber, P. et al. “High-Frequency Trading.” Goethe University Frankfurt, Working Paper, 2011.

- 10. O’Hara, Maureen. Market Microstructure Theory. Blackwell Publishers, 1995.

![Precision system for institutional digital asset derivatives. Translucent elements denote multi-leg spread structures and RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/precision-execution-infrastructure-for-institutional-digital-asset-derivatives-request-for-quote-protocol-optimization.jpg)

## Reflection

![A complex, reflective apparatus with concentric rings and metallic arms supporting two distinct spheres. This embodies RFQ protocols, market microstructure, and high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-3.jpg)

## From Obligation to Asset

The operational and technological framework required to fully automate best [execution 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 represents a significant investment of resources. Viewing this framework solely through the lens of regulatory obligation, however, misses a larger strategic point. The same data architecture, analytical capabilities, and governance structures built for compliance can be repurposed to generate profound insights into trading performance, liquidity sourcing, and overall market interaction. The system designed to satisfy the regulator can become a powerful engine for competitive advantage.

The process of codifying a firm’s execution policy into algorithmic logic forces a level of introspection and clarity that is often absent in manual, discretionary processes. It compels an organization to define precisely what “best” means in a multitude of scenarios and to justify those definitions with data. This act of translation from qualitative policy to quantitative code is where the true value is unlocked.

The resulting system is not just a compliance tool; it is an institutional asset, a repository of the firm’s accumulated market wisdom, and a platform for continuous improvement. The ultimate implication of automating best execution is the opportunity to transform a regulatory burden into a strategic system for mastering market complexity.

![A futuristic, metallic structure with reflective surfaces and a central optical mechanism, symbolizing a robust Prime RFQ for institutional digital asset derivatives. It enables high-fidelity execution of RFQ protocols, optimizing price discovery and liquidity aggregation across diverse liquidity pools with minimal slippage](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-platform-for-institutional-digital-asset-derivatives-rfq-protocol-optimized-execution-management-system-with-robust-liquidity-sourcing.jpg)

## Glossary

<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 focused view of a robust, beige cylindrical component with a dark blue internal aperture, symbolizing a high-fidelity execution channel. This element represents the core of an RFQ protocol system, enabling bespoke liquidity for Bitcoin Options and Ethereum Futures, minimizing slippage and information leakage](https://options.greeks.live/wp-content/uploads/2025/07/institutional-grade-digital-asset-derivatives-rfq-engine-core-precision-component.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 vibrant blue digital asset, encircled by a sleek metallic ring representing an RFQ protocol, emerges from a reflective Prime RFQ surface. This visualizes sophisticated market microstructure and high-fidelity execution within an institutional liquidity pool, ensuring optimal price discovery and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-framework.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/question/how-can-machine-learning-be-deployed-to-optimize-dealer-selection-in-an-automated-rfq-system/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Intersecting translucent aqua blades, etched with algorithmic logic, symbolize multi-leg spread strategies and high-fidelity execution. Positioned over a reflective disk representing a deep liquidity pool, this illustrates advanced RFQ protocols driving precise price discovery within institutional digital asset derivatives market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-optimized-algorithmic-execution-microstructure-for-price-discovery.jpg)

## Automated System

ML transforms dealer selection from a manual heuristic into a dynamic, data-driven optimization of liquidity access and information control. </a><a href="https://prime.greeks.live/question/how-should-an-order-execution-policy-balance-the-need-for-information-control-against-the-duty-of-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Abstract machinery visualizes an institutional RFQ protocol engine, demonstrating high-fidelity execution of digital asset derivatives. It depicts seamless liquidity aggregation and sophisticated algorithmic trading, crucial for prime brokerage capital efficiency and optimal market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-system-1.jpg)

## Execution Policy

An Order Execution Policy architects the trade-off between information control and best execution to protect value while seeking liquidity. </a><a href="https://prime.greeks.live/area/automated-best-execution/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, multi-layered system representing an institutional-grade digital asset derivatives platform. Its precise components symbolize high-fidelity RFQ execution, optimized market microstructure, and a secure intelligence layer for private quotation, ensuring efficient price discovery and robust liquidity pool management](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-digital-asset-derivatives-platform-prime-os.jpg)

## Automated Best Execution

Meaning ▴ Automated Best Execution refers to the algorithmic optimization of order routing and execution across disparate liquidity venues to achieve superior fill prices and minimize market impact for institutional digital asset derivatives. </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 sophisticated teal and black device with gold accents symbolizes a Principal's operational framework for institutional digital asset derivatives. It represents a high-fidelity execution engine, integrating RFQ protocols for atomic settlement](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocol-core-engine-for-best-execution.jpg)

## Under Mifid

A MiFID II misreport corrupts market surveillance data; an EMIR failure hides systemic risk, creating distinct operational and reputational threats. </a><a href="https://prime.greeks.live/area/data-architecture/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A translucent, faceted sphere, representing a digital asset derivative block trade, traverses a precision-engineered track. This signifies high-fidelity execution via an RFQ protocol, optimizing liquidity aggregation, price discovery, and capital efficiency within institutional market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-block-trade-high-fidelity-execution-protocol-prime-os-path.jpg)

## Data Architecture

Meaning ▴ Data Architecture defines the formal structure of an organization's data assets, establishing models, policies, rules, and standards that govern the collection, storage, arrangement, integration, and utilization of data. </a><a href="https://prime.greeks.live/question/how-does-a-best-execution-committee-quantify-and-compare-execution-quality-across-different-venues/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A sleek, cream-colored, dome-shaped object with a dark, central, blue-illuminated aperture, resting on a reflective surface against a black background. This represents a cutting-edge Crypto Derivatives OS, facilitating high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-prime-os-high-fidelity-rfq-execution-engine-intelligence-layer.jpg)

## Execution Venues

A Best Execution Committee systematically architects superior trading outcomes by quantifying performance against multi-dimensional benchmarks and comparing venues through rigorous, data-driven analysis. </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">
![Internal hard drive mechanics, with a read/write head poised over a data platter, symbolize the precise, low-latency execution and high-fidelity data access vital for institutional digital asset derivatives. This embodies a Principal OS architecture supporting robust RFQ protocols, enabling atomic settlement and optimized liquidity aggregation within complex market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-precision-execution-system-microstructure.jpg)

## Transaction Cost Analysis

Meaning ▴ Transaction Cost Analysis (TCA) is the quantitative methodology for assessing the explicit and implicit costs incurred during the execution of financial trades. </a><a href="https://prime.greeks.live/area/execution-quality/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Metallic platter signifies core market infrastructure. A precise blue instrument, representing RFQ protocol for institutional digital asset derivatives, targets a green block, signifying a large block trade](https://options.greeks.live/wp-content/uploads/2025/07/precision-institutional-digital-asset-derivatives-rfq-protocol-execution-engine-market-microstructure-optimization-for-alpha-generation.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/rts-28/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An advanced RFQ protocol engine core, showcasing robust Prime Brokerage infrastructure. Intricate polished components facilitate high-fidelity execution and price discovery for institutional grade digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-core-for-precision-trading.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/rts-27/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An abstract composition of interlocking, precisely engineered metallic plates represents a sophisticated institutional trading infrastructure. Visible perforations within a central block symbolize optimized data conduits for high-fidelity execution and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocols-multi-leg-execution-layer.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/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 robust, dark metallic platform, indicative of an institutional-grade execution management system. Its precise, machined components suggest high-fidelity execution for digital asset derivatives via RFQ protocols](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-platform-high-fidelity-price-discovery-and-atomic-settlement-infrastructure.jpg)

## Execution under Mifid

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

**Tags:** [Order Routing](https://options.greeks.live/area/order-routing/), [TCA](https://options.greeks.live/area/tca/), [RegTech](https://options.greeks.live/area/regtech/), [Automated Best Execution](https://options.greeks.live/area/automated-best-execution/), [MiFID II](https://options.greeks.live/area/mifid-ii/), [Regulatory Technology](https://options.greeks.live/area/regulatory-technology/)	

## Discover More

- 
### [What Are the Primary Regulatory Differences between MiFID II and FINRA Best Execution?](https://options.greeks.live/question/what-are-the-primary-regulatory-differences-between-mifid-ii-and-finra-best-execution/)
![Two intertwined, reflective, metallic structures with translucent teal elements at their core, converging on a central nexus against a dark background. This represents a sophisticated RFQ protocol facilitating price discovery within digital asset derivatives markets, denoting high-fidelity execution and institutional-grade systems optimizing capital efficiency via latent liquidity and smart order routing across dark pools.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-rfq-execution-system-architecture.jpg)

MiFID II and FINRA best execution rules differ in their core architecture prescriptive data disclosure versus principles-based procedural diligence.

- 
### [What Are the Core Components of a Best Execution Policy under Both FINRA and MiFID II Regulations?](https://options.greeks.live/question/what-are-the-core-components-of-a-best-execution-policy-under-both-finra-and-mifid-ii-regulations/)
![A sleek central sphere with intricate teal mechanisms represents the Prime RFQ for institutional digital asset derivatives. Intersecting panels signify aggregated liquidity pools and multi-leg spread strategies, optimizing market microstructure for RFQ execution, ensuring high-fidelity atomic settlement and capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-engine.jpg)

A best execution policy is a firm's documented, data-driven system for ensuring client orders achieve the most favorable terms available.

- 
### [How Does AI Help in Meeting the Best Execution Requirements of MiFID II?](https://options.greeks.live/question/how-does-ai-help-in-meeting-the-best-execution-requirements-of-mifid-ii/)
![A marbled sphere symbolizes a complex institutional block trade, resting on segmented platforms representing diverse liquidity pools and execution venues. This visualizes sophisticated RFQ protocols, ensuring high-fidelity execution and optimal price discovery within dynamic market microstructure for digital asset derivatives. It reflects capital efficiency and intelligent smart order routing.](https://options.greeks.live/wp-content/uploads/2025/07/principal-rfq-aggregation-digital-asset-derivative-execution-optimization.jpg)

AI provides the predictive analytics and dynamic optimization required to systematically prove best execution across fragmented markets.

- 
### [How Does MiFID II Differ from Regulation NMS on Best Execution?](https://options.greeks.live/question/how-does-mifid-ii-differ-from-regulation-nms-on-best-execution/)
![Abstract visual representing an advanced RFQ system for institutional digital asset derivatives. It depicts a central principal platform orchestrating algorithmic execution across diverse liquidity pools, facilitating precise market microstructure interactions for best execution and potential atomic settlement. The interconnectedness highlights optimized order flow.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-platform-institutional-digital-asset-derivatives-ecosystem.jpg)

MiFID II mandates a comprehensive, multi-asset process for best execution, while Reg NMS focuses on price protection for U.S. equities.

- 
### [What Are the Practical Implications of the E.U.’s Suspension of Rts 28 Reporting?](https://options.greeks.live/question/what-are-the-practical-implications-of-the-e-u-s-suspension-of-rts-28-reporting/)
![Intricate metallic mechanisms portray a proprietary matching engine or execution management system. Its robust structure enables algorithmic trading and high-fidelity execution for institutional digital asset derivatives. Interconnecting lines signify FIX protocol data flow and RFQ protocol pathways vital for price discovery.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-market-microstructure.jpg)

The suspension of RTS 28 shifts the burden of proof for best execution from public reporting to robust, proprietary internal analytics.

- 
### [What Are the Regulatory Implications of Counterparty Selection and Best Execution under MiFID II?](https://options.greeks.live/question/what-are-the-regulatory-implications-of-counterparty-selection-and-best-execution-under-mifid-ii/)
![A sleek, spherical, off-white device with a glowing cyan lens symbolizes an Institutional Grade Prime RFQ Intelligence Layer. It drives High-Fidelity Execution of Digital Asset Derivatives via RFQ Protocols, enabling Optimal Liquidity Aggregation and Price Discovery for Market Microstructure Analysis.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimal-execution-1.jpg)

MiFID II mandates a data-driven system where counterparty viability and execution factors forge optimal client outcomes.

- 
### [What Are the Key Differences in Best Execution Requirements between Mifid Ii and Regulation Nms?](https://options.greeks.live/question/what-are-the-key-differences-in-best-execution-requirements-between-mifid-ii-and-regulation-nms/)
![A central illuminated hub with four light beams forming an 'X' against dark geometric planes. This embodies a Prime RFQ orchestrating multi-leg spread execution, aggregating RFQ liquidity across diverse venues for optimal price discovery and high-fidelity execution of institutional digital asset derivatives.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-orchestrating-high-fidelity-execution-and-optimal-price-discovery.jpg)

MiFID II requires a holistic, process-driven proof of best outcome; Reg NMS mandates price protection against a national best bid and offer.

- 
### [What Are the Core Data Requirements for Proving Best Execution under MiFID II?](https://options.greeks.live/question/what-are-the-core-data-requirements-for-proving-best-execution-under-mifid-ii/)
![A central glowing blue mechanism with a precision reticle is encased by dark metallic panels. This symbolizes an institutional-grade Principal's operational framework for high-fidelity execution of digital asset derivatives. It embodies RFQ processing, enabling price discovery within a deep liquidity pool, optimizing market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/precision-core-enabling-institutional-digital-asset-derivatives-rfq-execution.jpg)

Proving MiFID II best execution requires a systemic data architecture to empirically validate execution quality against all relevant factors.

- 
### [How Do Regulatory Frameworks like MiFID II Influence the Design of Rfq Systems in an Ems?](https://options.greeks.live/question/how-do-regulatory-frameworks-like-mifid-ii-influence-the-design-of-rfq-systems-in-an-ems/)
![Precision-engineered institutional-grade Prime RFQ component, showcasing a reflective sphere and teal control. This symbolizes RFQ protocol mechanics, emphasizing high-fidelity execution, atomic settlement, and capital efficiency in digital asset derivatives market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-precision-execution-system-design.jpg)

MiFID II mandates that RFQ systems evolve from simple messaging tools into auditable, data-centric platforms proving best execution.

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---

**Original URL:** https://options.greeks.live/question/what-are-the-regulatory-implications-of-fully-automating-best-execution-under-mifid-ii/
