Best Execution requires investment firms (IFs) to provide the best available terms for the execution of client orders under MiFID II. The most favourable terms for the execution of client orders include consideration of the following factors:
- likelihood of execution;
- settlement size;
- settlement nature; and
- any other relevant consideration.
IFs must also create an execution policy and procedures, and regularly monitor the execution quality when executing orders on behalf of their clients.
All IFs must comply with Best Execution which is embedded in Article 27 of MiFID II.
Who is required to report?
RTS 27 reports – execution venues including trading venues, systematic internalisers (SIs), market makers and liquidity providers. In addition, ESMA considers CFD/FX brokers who ‘deal on own account and regularly quote two-way pricing for an instrument’ would meet the definition of liquidity providers and therefore be subject to RTS 27 obligations.
RTS 28 reports – IFs (including CFD/FX brokers) who execute client orders through execution venues.
What information do I need to report?
RTS 27 reports aim to demonstrate the quality of execution of transactions and are composed of the following 9 tables of data:
|1||Type of execution venue|
|2||Type of financial instrument|
|3||Intra-day price information|
|4||Daily price information|
|6||Likelihood of execution information|
|7||Additional likelihood of execution information for continuous auction order book and continuous quote driven execution venues|
|8||Additional information for continuous auction order book and continuous quote driven execution venues|
|9||Additional information for quote execution venues|
RTS 28 reports require all IFs to demonstrate the top 5 execution venues that they used for client orders in each class of financial instrument.
When are reports to be published?
RTS 28 reports are to be published annually, as per the following table:
|Reports||Reporting Period||Publication Date|
|RTS 28||1 January - 31 December||30 April (following year)|
TRAction’s Best Execution Monitor
As it stands, the obligation to publish RTS 27 reports is suspended until the end of 2021.
Our Best Execution Monitor is equipped to help you comply with the Best Execution reporting requirements. Learn more.