ESMA finalises rules on order execution policies under MiFID II
10 April 2025 EU
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The European Securities and Markets Authority (ESMA) has published the final report on the rules explaining how investment firms should establish their order execution policies and assess their effectiveness.
This is part of the EU’s second Markets in Financial Instruments Directive (MiFID II), which provides a legal framework for securities markets, investment intermediaries, and trading venues.
In the draft regulatory technical standards (RTS), the EU’s financial markets regulator and supervisor specifies the rules, with the objective of enhancing investment firms’ order execution and fostering investor protection.
The RTS include requirements on the establishment of an investment firm’s order execution policy — such as the classification of financial instruments in which firms execute client orders and the selection of venues for the order execution policy.
Additionally, the investment firms’ procedures and criteria to monitor and regularly assess the effectiveness of its order execution arrangements and order execution policy are also addressed.
The final report has been sent to the European Commission, and ESMA will provide further technical guidance if requested.
This is part of the EU’s second Markets in Financial Instruments Directive (MiFID II), which provides a legal framework for securities markets, investment intermediaries, and trading venues.
In the draft regulatory technical standards (RTS), the EU’s financial markets regulator and supervisor specifies the rules, with the objective of enhancing investment firms’ order execution and fostering investor protection.
The RTS include requirements on the establishment of an investment firm’s order execution policy — such as the classification of financial instruments in which firms execute client orders and the selection of venues for the order execution policy.
Additionally, the investment firms’ procedures and criteria to monitor and regularly assess the effectiveness of its order execution arrangements and order execution policy are also addressed.
The final report has been sent to the European Commission, and ESMA will provide further technical guidance if requested.
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