September 2017

MiFID II - Best Execution Checklist

What are the Best Execution requirements?

Among the many aims of the MiFID II regulation, a key component is the goal to “increase investor protection”. Much emphasis has been placed upon the encouragement of greater transparency, controls to avoid conflicts of interest and investment advice. However, it is the changes to the obligations firms have when receiving, transmitting and executing orders, namely demonstrating best execution, which will have far reaching consequences.

Best-execution-reporting is outlined in RTS 27 and RTS 28 of MiFID.  RTS 27 places the reporting obligation on execution venues (including MTFs, OTFs and RMs), Systematic Internalisers (SIs) and market-makers, requiring them to publish data relating to the quality of execution. RTS 28 necessitates that investment firm’s make public the top five execution brokers and venues by volume on an annual basis. 

Another piece of best execution regulation is the monitoring requirement, with Article 27 of MiFID II stating: 

Investment firms should take “all sufficient steps to obtain, when executing order, the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.”

Best practice suggestions:


  • Define and document a compliant execution workflow

  • Assign accountability internally for the process

  • Establish if there are any potential conflicts of interest

  • Identify the metrics to be used to monitor if you are meeting your best ex requirements


  • Establish a process to track and manage transaction costs

  • Track the quality of venue execution and the consistency of that quality

  • Develop a framework to identify any outliers


  • Identify your data requirements and where it will be sourced from

  • Execution venues (trading venue, Systematic Internaliser, Market Maker and other liquidity provider) must publish data relating to quality of execution. Reports to include details about price, cost, speed and likelihood of execution for individual financial instruments (RTS 27)

  • Publicly disclose your top 5 counterparties by volume on an annual basis (RTS 28)


  • Trading on the MarketAxess platform can contribute to meeting your RTS 27 reporting obligation

  • Demonstrate best execution by leveraging competitive quotes via MarketAxess’ vast network of over 1,200 firms and the Open Trading™ all-to-all marketplace

  • Trax offers automated RTS 27 and RTS 28 reporting services as an Approved Reporting Mechanism (ARM) under MiFID and an Approved Publication Arrangement (APA) under MiFID II

  • MarketAxess and Trax data products provide firms with relevant and timely information on  intra-day aggregated trade volume, pricing information and discovery, liquidity of individual bonds and market depth

  • MarketAxess TCA reports to help benchmark individual performance against various industry metrics


Any views expressed in this document are the views of MarketAxess or our advisors, and is not intended to be a substitute for parties obtaining independent legal advice as the rules pertain to you.