Better execution of orders MiFID II 2026: what brokers and asset managers must change

Key data

Investment service providers operating in Spain have an immediate obligation on the table: to thoroughly review their order execution policies. The Delegated Regulation (EU) 2026/825, published on 23 July 2026, establishes new technical criteria on how these policies should be designed and evaluated, and repeals the regulations that have been in force since 2017.

It is not a minor adjustment. The regulation affects the core of the relationship between the entity and its client: how price, cost, speed and probability of execution are prioritized when processing an order. Any internal procedure, monitoring system or policy document based on Delegated Regulations (EU) 2017/575 or 2017/576 becomes obsolete.

What does this regulation establish?

Delegated Regulation (EU) 2026/825 complements MiFID II Directive (2014/65/EU) with technical regulatory standards that specify the criteria that investment service providers must apply at two key moments:

• When designing their best execution policies for orders.
• When evaluating the effectiveness of such policies on a continuous basis.

The criteria directly affect how entities prioritize the following factors when executing a client order:

• Price
• Cost
• Speed of execution
• Probability of execution

What changes compared to the previous regulation?

Economic and operational impact

The impact is not a direct sanction with a fixed published amount: it is an operational and supervisory risk impact. Affected entities must assume internal adaptation costs in three areas:

• Review and drafting of internal policies: current best execution policy documents must be rewritten in accordance with the new technical criteria.
• Update of procedures: operational flows for order processing and prioritization must be aligned with the new standards.
• Monitoring systems: tools and processes for monitoring execution quality must be adapted to comply with the new effectiveness evaluation requirements.

The real economic risk is in non-compliance: the CNMV, as supervisor in Spain, can impose sanctions if it detects that an entity continues to operate with policies based on the repealed 2017 regulation. The severity of supervisory sanctions in the MiFID II area can be significant, although the regulation does not set specific amounts.

Who does it affect?

• Brokers that execute client orders in financial markets.
• Fund managers that process buy and sell orders for assets.
• Investment banks with order execution activity on behalf of clients.
• Trading platforms that act as investment service providers.
• Financial entities with investment units that execute orders under MiFID II.

In practice, any entity that is authorized as an investment service provider in Spain and executes client orders is directly obligated to adapt its policies.

Practical example

A Spanish fund manager currently has a best execution policy drafted in 2021, based on the criteria of Delegated Regulation (EU) 2017/575. That policy defines how the manager prioritizes price over speed when executing equity orders for its funds.

With the entry into force of Delegated Regulation (EU) 2026/825, that policy becomes technically obsolete because the regulatory framework that supported it — Regulation 2017/575 — has been repealed. The manager must:

1. Review the new technical criteria of Regulation 2026/825.
2. Update its best execution policy to reflect the new design and evaluation standards.
3. Update its execution quality monitoring systems.
4. Document the adaptation process to be able to prove it to the CNMV if required.

If the CNMV conducted an inspection and detected that the manager continues to apply criteria based on repealed regulation, the entity would be exposed to a sanctioning proceeding.

What should companies do now?

1. Identify which internal policies are based on Regulations 2017/575 and 2017/576: any document that cites these standards as a basis should be marked for urgent review.
2. Read and analyze Delegated Regulation (EU) 2026/825: the compliance team must identify the new technical criteria required for policy design and evaluation.
3. Update the best execution policy: draft a new version in accordance with 2026 criteria, with special attention to the weighting of price, cost, speed and probability of execution.
4. Review and adapt monitoring systems: execution quality monitoring processes must comply with the new effectiveness evaluation standards.
5. Update documentation provided to clients: if the best execution policy is communicated to clients (as required by MiFID II), the updated version must be made available.
6. Document the entire adaptation process: in the event of a CNMV inspection, the entity must be able to prove that it has reviewed and updated its policies in accordance with the new regulation.

Official source

Consult complete regulation in official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202600825