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The financial technologist's guide to MiFID II transition

Itiviti : Christine Blinke - 3rd November 2016

The opinions expressed by this blogger and those providing comments are theirs alone, this does not reflect the opinion of Automated Trader or any employee thereof. Automated Trader is not responsible for the accuracy of any of the information supplied by this article.

January 3, 2018 will be a milestone in European financial markets, as the MiFID II Directive is then implemented in all EU member states, with major implications expected for market participants: trading venues, investment firms and their clients, and for any firm with trading activities in the EU.

Based on our dialogue with clients, Itiviti was early aware of their need for a new toolset to help ease the regulatory burden and control costs for compliance. We started development of an all-new solution to manage collection and consolidation of order/trade data together with market data to secure fully compliant reporting and monitoring.

The result is Itiviti Analyst, a comprehensive regulatory solution built with a modular approach that enables firms to stay on top of new regulatory requirements regarding market abuse, reporting and execution quality. We have already introduced the first module, Itiviti Analyst MAR, to address market abuse regulation that became effective this past July.

New regulatory demands introduced by MiFID II include:

  • Significantly increased volumes of regulatory reporting and monitoring. leading to a potentially excessive data collection workload.
  • Revised transparency rules on pre-trade and post-trade information and market data feeds. This will have immediate effects on trading platforms, processes and strategies.
  • Further obligations for market makers, a vital function served by Itiviti solutions.
  • Expanded scope of the Systematic Internaliser regime, increasing the role of SIs.

Itiviti specifically wants to address the key areas where MiFID II introduces fundamental changes in European markets, and conducted with the common design objective to allow implementation with minimal impact on existing trading infrastructure. Itiviti Analyst achieves this by making use of industry-standard FIX drop copy of orders and trades in real time. This facilitates deployment and integration with existing trading solutions from any vendor.

Through our partnership with OneTick, Itiviti Analyst adds new data management and analytics capabilities to help clients meet the stringent demands on reporting as well as proof of Best Execution, and doing so in a highly automated fashion.

We develop Itiviti Analyst with innovation in mind, including business innovation. Compliance or "MiFID II enabled" are only the basic requirements. We should offer solutions that also help clients capture opportunities as a new European market structure emerges as a consequence of regulatory change.

The transition to MiFID II is not just an issue involving new software and operating procedures. Aside from delivering solid trading technology, Itiviti is also a speaking partner and advisor, to guide our clients to success in the new regulatory landscape.

Further information on MiFID II transition and Itiviti Analyst is available here.

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