MiFID II: Practical Considerations for Gainful Compliance

The EU’s Markets in Financial Instruments Directive (MiFID) II – which applies from January 2018 – aims to extend the market transparency introduced by its predecessor regulation to new areas of the marketplace. In many cases, MiFID II will be more granular, more prescriptive and more onerous than MiFID I, raising business and technology challenges for affected parties that will need to be resolved under a tight deadline.

The incoming MiFID II regulation will broaden the scope of its predecessor to include new asset classes, including derivatives and fixed income securities. The regulation seeks to establish similar principles of transparency and execution quality across all instruments, having previously focused on equities only.

This paper looks at how the regulation will impact affected firms, and offers guidance on meeting the technology and process requirements under the new market structure rules and definitions. It draws upon a survey of electronic trading executives from Tier 1, Tier 2 and Tier 3 sell-side financial institutions across Europe conducted by A-Team Group, publisher of Intelligent Trading Technology.