EU replaces MiFID II best execution reporting with new order execution policy standards from February 2028
Investment firms lose the RTS 27 and RTS 28 publication regime and must instead document venue selection, run threshold-based monitoring and reassess execution policies annually from 12 February 2028
Change
Commission Delegated Regulation (EU) 2026/825 of 14 April 2026, published 23 July 2026, sets the regulatory technical standards under Article 27(10) of Directive 2014/65/EU on establishing and assessing the effectiveness of investment firms' order execution policies, and repeals Delegated Regulations (EU) 2017/575 and (EU) 2017/576; it applies from 12 February 2028.
Why it matters
Firms must maintain an internal list of selected execution venues recording, for each, the name and identifier, approval date, the person or governance body that approved it, the instrument classes and transaction types it may be used for, whether it serves retail or professional clients, and any other limitations. Monitoring must run against firm-set thresholds per instrument class covering accepted price deviation from reference data, the minimum percentage of traded volume meeting reference values, and the minimum number of orders meeting them, tested on a representative sample. Effectiveness must be assessed at least annually, and additionally whenever monitoring shows non-compliance or a material change occurs. Firms selecting a single venue must justify that choice and periodically compare results against available alternatives. Firms dealing on own account against client orders must document conflict-of-interest measures and price-fairness checks, using internal pricing models only where no reliable market or comparable-instrument price exists. Classes must be identified per the Annex, with separate sub-classes where execution methods differ materially or where the Annex classes prevent effective assessment.
Implications
- — Investment firms currently producing RTS 28 annual best execution reports and relying on venue-published RTS 27 execution quality data must plan for both to disappear — Delegated Regulations (EU) 2017/575 and (EU) 2017/576 are repealed, so the venue-published dataset firms use to benchmark execution quality will no longer exist and must be replaced with reference data, including consolidated tape data where available.
- — Best execution and compliance teams must set quantitative monitoring thresholds per class of financial instrument — accepted deviation from reference prices, minimum percentage of volume meeting reference values, and minimum number of qualifying orders — because monitoring is no longer a qualitative review and unthresholded monitoring cannot demonstrate consistent best execution.
- — Firms that route all client orders in a class to a single execution venue must build a periodic comparison against available alternative venues and justify the single-venue choice in the policy itself, since a single-venue arrangement no longer stands without a documented consistency test against alternatives.
- — Firms executing client orders by dealing on own account, including matched principal and OTC trades, must document how price fairness is established from observed market prices, then comparable instruments, and only then internal models — an internal pricing model used where reliable market or comparable-instrument data exists will not satisfy the standard.
Who is affected
- — Investment firms executing client orders under MiFID II
- — Best execution, compliance and governance teams at investment firms
- — Execution venues currently publishing execution quality data under RTS 27
What to watch
- — Application: 12 February 2028 — the Regulation applies from that date, giving firms 18 months from entry into force to adjust order execution policies, procedures and IT infrastructure.
- — Entry into force: 12 August 2026 — the Regulation enters into force on the twentieth day following its 23 July 2026 publication, from which date the repeal of Delegated Regulations (EU) 2017/575 and (EU) 2017/576 takes effect.