Art. 20 of MiFID II Art. 27 of MiFID II
When an investment firm operates an OTF, at which level should the best execution policy be set? At the level of the investment firm or at the level of the OTF or both? Would similar requirements apply to a market operator operating an OTF?
Answer 13
Where an investment firm operates an OTF, ESMA is of the view that the investment firm’s best execution policy should cover how orders are executed both at the level of the investment firm and at the level of the OTF and, in particular, how discretion is exercised at each stage.
Firstly, an investment firm operating an OTF should, in the same way as other investment firms that execute client orders, have a firm-level execution policy setting out the various execution venues, including its own OTF, that it will be considering when receiving a client order and explain in which circumstances an execution venue would prevail over the others.
Secondly, the investment firm should have either a separate
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