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MiFID II’s new trading venues: are you ready?

A full moon is seen rising over the Asian part of the city in Istanbul, Turkey, May 10, 2017. Photographer: Murad Sezer

New trading venues are set to emerge as part of MiFID II. How will the financial industry adapt to fundamental change in the markets landscape?

There is no doubt that MiFID II will change the way many asset classes are traded.

Find our more about how MiFID II will effect trading venues

Sourcing liquidity in equity markets will continue to be a key factor, driven by smart order routing and sophisticated algorithms, as well as by Indication of Interest and block discovery in the case of tighter controls on dark pool trading.

However, the real impact will be felt in fixed income, currencies, commodities and other OTC markets. All will see more fundamental change due to:

  • New transparency obligations
  • New trading mandates
  • The changing requirements of pricing and principal trading
  • The need to comply with tighter market maker obligations and handle the platform changes driven by new derivative trading mandates.

MTFs and other venues

New venues are already emerging and will continue to do so in order to address structural issues in less liquid markets.

As part of MiFID II, we will expand our multilateral trading facilty (MTF) service to include FXall QuickTrade* along with Forwards Matching, which is operated as an MTF today.

The other development well underway is the introduction of the Systematic Internaliser (SI) regime in many global banks, as well as the rise of Organized Trading Facilities.

Game changing for FX

MiFID II will drive fundamental change for everyone involved with forex trading, whether they are banks, alternative market makers, asset managers, hedge funds or corporates.

With the stakes so high and scrutiny intense, it’s crucial to access solutions that are both proven and trusted.

Find out how FXall gives you a clear competitive edge

Long before MiFID II was under discussion, we were a leader in FX, and continue that legacy today.

For example, more than 5,000 buy and sell-side professional FX market participants trust our transaction platforms to trade over US$350 billion in average daily volume.

We provide the ability to trade on FX compliant platforms with suitable volume and liquidity levels to meet FX trading requirements.

Find out more about FX Trading

We already have in place solutions to help customers not just comply, but to gain a competitive edge over other market participants.

They include:

  • MTFs

We are expanding the MTF to include FXall QuickTrade* along with Forwards Matching which is operated as an MTF today.

In order to meet our obligation to report all trades made on the MTF, we will publish to the Tradeweb Approved Publication Arrangement.

  • Reporting

We are developing new reporting options for both pre- and post-trade reporting, a key MiFID II requirement aimed at electronic and algo trading in particular.

  • User interfaces

We are upgrading our graphical user interfaces (GUI) and application programming interfaces (API) to accommodate new data fields necessitated by MiFID II, as well as straight through processing (STP) feeds.

This will help trade parties meet their own reporting and record keeping requirements.

  • Cost analysis

We and our strategic partners will allow our buy-side customers who use FXall and FX Trading to streamline analysis of transaction costs, helping them with best execution requirements.

Find out how FXall gives you a clear competitive edge

They will have seamless connectivity to the independent transaction cost analysis (TCA) service provided by our partner BestX.

Watch video — Risk Management Fundamentals

The trading landscape in terms of regulation with MiFID II will continuously change and evolve over the coming months. We are well equipped to help with these changing requirements and are ready to answer your questions on MiFID II.

*FXall QuickTrade Instrument coverage:  forwards, swaps, NDFs and options.

Learn how we can help you thrive in a MiFID II world