EC adopts Delegated Regulation setting RTS on order execution policy

The European Commission has adopted a Delegated Regulation supplementing Directive 2014/65/EU (MiFID II), with regard to regulatory technical standards (RTS) specifying the criteria to be taken into account by investment firms when establishing and assessing the effectiveness of their order execution policies. The Delegated Regulation is based on ESMA's final draft RTS published in April 2025. The RTS specify rules on, among other things: (i) selecting execution venues; (ii) monitoring investment firms' execution policies; (iii) order routing; (iv) the handling of specific client instructions and related investor protection safeguards; (v) the periodic assessment of investment firms' order execution policies; and (vi) how to identify classes and subclasses of financial instruments for which the investment firms execute orders on behalf of clients.

When the Delegated Regulation enters into force, it will repeal Delegated Regulation (EU) 2017/575 which sets out data to be published by execution venues on the quality of execution of transactions on their venues and Delegated Regulation (EU) 2017/576, which sets out obligations for investment firms to publish information on the identity of execution venues and the quality of execution obtained. The Delegated Regulation will enter into force on the 20th day following its publication in the Official Journal of the European Union. It will apply 18 months after entry into force, allowing firms time to update their order execution policies, procedures and systems.

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