On 14 April 2026, the European Commission (Commission) published a draft Commission Delegated Regulation supplementing the Markets in Financial Instruments Directive II (MiFID II) with regard to regulatory technical standards (RTS) specifying the criteria to be taken into account in establishing and assessing the effectiveness of order execution policies of investment firms and repealing Delegated Regulations (EU) 2017/575 and (EU) 2017/576.
Directive 2024/7903 amending MiFID II empowers the Commission to adopt RTS developed by the European Securities and Markets Authority (ESMA) with regard to the criteria to be considered by investment firms when establishing and assessing the effectiveness of their order execution policies. The draft Delegated Regulation sets out requirements for the order execution policy of investment firms.
The draft Delegated Regulation is based on RTS developed by ESMA and specify in particular the rules for:
- Selecting execution venues to enable investment firms to consistently achieve the best possible result when executing client orders.
- Monitoring the investment firms’ execution policies and in particular the data to be used by investment firms to enable them to monitor their execution policies and arrangements.
- Order routing to avoid adverse impact on the execution quality.
- Dealing with the specific instructions from clients and the safeguards to avoid unfavourable consequences to investor protection.
- Assessing periodically the effectiveness of the investment firms’ order execution policy.
- Identifying classes of financial instruments to ensure that the execution quality can be assessed for homogenous groups of products.