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Version date: 10 October 2016 - onwards

Question 2 Checking fairness of prices when executing orders or decisions in OTC products [Last update: 10 October 2016]

Art. 27 of MiFID II Art. 64(4) of the MiFID II Delegated Regulation

What is meant by checking the fairness of the price proposed to the client when executing orders or decisions to deal in OTC products?

Answer 2

MiFID II strengthens the existing best execution standard in relation to OTC [For the purposes of this Q&A, a financial instrument is an Over The Counter or OTC product when it is: (i) not admitted to trading, or, (ii) not traded on a trading venue (i.e. a regulated market, an MTF or OTF).] products. In this regard, Article 64 of the MiFID II Delegated Regulation requires firms to check the fairness of the price proposed to the client when executing orders or taking decisions to deal in OTC products, including bespoke products, by gathering market data used in the estimation of the price of such products and, where possible, by comparing with similar or comparable products.

Firms, as a matter of practice, may be routinely taking account of external market data and externa

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