MiFID II—microstructural issues
MiFID II—microstructural issues

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • MiFID II—microstructural issues
  • Overview of MiFID II and microstructural issues
  • Investment firms engaged in algorithmic trading: organisational requirements
  • Systems and controls
  • Governance
  • Compliance function
  • Staff and training
  • IT outsourcing and procurement
  • Testing and deployment
  • Post-deployment management
  • More...

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

Algorithmic trading, and specifically high frequency trading (HFT), attracted significant focus during the review of the Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID I) that resulted the revised and recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II). HFT was blamed for causing the 'flash crash' in May 2010. Ever since, HFT has been the subject of much debate, and regulators around the world have been investigating the impact of HFT on financial markets. Among other things, MiFID II requires firms and trading venues to establish effective systems and risk controls and ensure that trading systems are resilient and have sufficient capacity. This Practice Note details the requirements introduced by MiFID II for investment firms and trading venues with regard to algorithmic and high frequency trading, market making, direct electronic access (DEA) and tick sizes. It includes a summary of the level 1 legislation, as well as relevant level 2

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