Request for quote

ARequest for Quote(RfQ) is afinancialterm for certain way to ask abankfor an offer of a givenfinancial instrumentfrom a bank, made available by so-calledApproved Publication Arrangement(APA) by thestock marketsitself or byFinancial data vendorsas required in Europe byMiFID IIand in effect since January 2018.^[1]A RFQ contains at least theISINto uniquely identify the financial product, the type (buy/ sell), the amount, a currency, and the volume ( ${\hbox{amount}}\times {\hbox{market price}}$ in given currency).

Background

In the wake of the2007-09 financial crisisthere was an initiative to create morepre-trade transparency,for which it is essential to know who is requesting which financial product.^[2]

Article 1(2) of the Commission Delegated Regulation (EU) 2017/583 of 14 July 2016 (which supplements Regulation (EU) No 600/2014 of the European Parliament and of the council on markets in financial instruments) defines:^[3]

Arequest-for-quote(RfQ) system is a trading system where the following conditions are met:
a quote or quotes by a member or participant are provided in response to a request for a quote submitted by one or more other members or participants;

the quote is executable exclusively by the requesting member or participant;

the requesting member or market participant may conclude a transaction by accepting the quote or quotes provided to it on request.

This essentially means, that everybody buying or sellingstocks,bonds,foreign exchange,commodities orexchange-traded funds(ETFs) will (automatically) generate an RfQ before the trade is settled.

References

^"Service and Technical Description - Request for Quote (RfQ)"(PDF).London Stock Exchange.Version 1.1. 23 Oct 2018.Retrieved8 July2019.
^Bollenbacher, George."Through a Glass Darkly – Transparency for Non-Equities Under MiFID II/MIFIR".OTC Space.Retrieved8 July2019.
^"Request-for-quote (RFQ) system".www.emissions-euets.com.Retrieved8 July2019.

External links

TheMiFID IIandAPAdata is distributed e.g. by