A client instruction is an important part of the execution record, but its effect depends on what it actually specifies. MiFID II’s best-execution framework requires investment firms to consider several execution factors and to follow specific client instructions. The delegated rules clarify that the instruction affects the obligation for the aspects it covers, rather than erasing every remaining choice. EUR-Lex: MiFID II, Directive 2014/65/EU, Article 27 EUR-Lex: Delegated Regulation 2017/565, Articles 64 and 66
Follow the evidence
Trace how the event could reach markets, then inspect a competing explanation.
Compare explanations
Switch lenses to see what each account explains—and what remains uncertain.
WFN analysis: suppose a client specifies a venue but leaves timing and the handling of any remaining quantity to the firm. That instruction determines the venue choice in the example. It does not tell the reviewer how the other decisions were made. An assessment should therefore identify the instructed element and examine the choices that were still open. Now consider a client who specifies both a venue and a limit price. Those two constraints may make immediate execution unavailable even when another venue displays a different price. A comparison that ignores the client’s constraints would assess an order the firm was never instructed to execute. The correct record needs the actual instruction, not a more convenient hypothetical alternative. The scope can become less clear when marketing language is used instead of an order record. An instruction should be traceable to what the client requested and when the firm received it. A generic claim that the customer chose the platform is not equivalent to a specific instruction about every element of a particular execution.
WFN analysis: suppose a client specifies a venue but leaves timing and the handling of any remaining quantity to the firm. That instruction determines the venue choice in the example. It does not tell the reviewer how the other decisions were made. An assessment should therefore identify the instructed element and examine the choices that were still open. Now consider a client who specifies both a venue and a limit price. Those two constraints may make immediate execution unavailable even when another venue displays a different price. A comparison that ignores the client’s constraints would assess an order the firm was never instructed to execute. The correct record needs the actual instruction, not a more convenient hypothetical alternative. The scope can become less clear when marketing language is used instead of an order record. An instruction should be traceable to what the client requested and when the firm received it. A generic claim that the customer chose the platform is not equivalent to a specific instruction about every element of a particular execution.
A useful review puts the execution policy alongside the client instruction and the resulting transaction. It asks which factors were relevant, which elements were constrained and what evidence explains the remaining decisions. This connects the legal framework to a concrete order without assuming that every trade must receive the best imaginable price observed anywhere at any later time. This article addresses the MiFID investment-firm framework and the specified provisions, not a universal rule for every broker or asset worldwide. It makes no claim about obsolete venue-reporting requirements or a newly adopted October law. Its practical conclusion is about evidence: define the instruction’s boundaries before deciding whether it explains the execution choices under review.
Price is one factor within a defined framework
Article 27 identifies price, costs, speed, likelihood of execution and settlement, size, nature and other relevant considerations. For retail clients, the best possible result is assessed through total consideration: the instrument’s price plus directly related execution costs. A headline commission alone therefore does not describe the full retail comparison in the provision. EUR-Lex: MiFID II, Directive 2014/65/EU, Article 27
Article 64 of the delegated regulation addresses the effect of following specific instructions. Article 66 requires a warning that such instructions may prevent the firm from taking the steps in its execution policy for the elements covered. These provisions make the content and scope of the instruction material to the review. EUR-Lex: Delegated Regulation 2017/565, Articles 64 and 66
A hypothetical instruction can narrow one choice without deciding all others
WFN analysis: suppose a client specifies a venue but leaves timing and the handling of any remaining quantity to the firm. That instruction determines the venue choice in the example. It does not tell the reviewer how the other decisions were made. An assessment should therefore identify the instructed element and examine the choices that were still open.
Now consider a client who specifies both a venue and a limit price. Those two constraints may make immediate execution unavailable even when another venue displays a different price. A comparison that ignores the client’s constraints would assess an order the firm was never instructed to execute. The correct record needs the actual instruction, not a more convenient hypothetical alternative.
The scope can become less clear when marketing language is used instead of an order record. An instruction should be traceable to what the client requested and when the firm received it. A generic claim that the customer chose the platform is not equivalent to a specific instruction about every element of a particular execution.
Read policy, instruction and outcome together
A useful review puts the execution policy alongside the client instruction and the resulting transaction. It asks which factors were relevant, which elements were constrained and what evidence explains the remaining decisions. This connects the legal framework to a concrete order without assuming that every trade must receive the best imaginable price observed anywhere at any later time.
This article addresses the MiFID investment-firm framework and the specified provisions, not a universal rule for every broker or asset worldwide. It makes no claim about obsolete venue-reporting requirements or a newly adopted October law. Its practical conclusion is about evidence: define the instruction’s boundaries before deciding whether it explains the execution choices under review.