What Is the Impact of Latency on Execution Quality in Both CLOB and RFQ Systems?

In CLOB systems, lower latency is critical for execution quality, as orders are matched based on price and time priority. High latency can lead to 'slippage' or missed execution opportunities.

In RFQ systems, while latency still matters, the impact is less direct, as the execution is negotiated and often involves a 'last look.' However, higher latency can still result in the quoted price becoming stale, leading to a rejection or a less favorable final price.