Does the categorisation of ‘passive’ and ‘aggressive’ orders apply to investment firms which use quote-driven trading systems to have client orders executed?

Answer 23

The definitions of Article 2(a) and (b) of RTS 28 for aggressive and passive orders both refer to “orders entered into an order book”. However, quote-driven trading systems do not operate order books (see also the typology and descriptions set out in Annex I of RTS 2). Therefore, as part of their RTS 28 reporting, investment firms which use quote-driven trading systems to have client orders executed should insert a ‘N/A’ (i.e. ‘not applicable’) reference in the fields referring to passive and aggressive orders of the relevant reporting template.