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MiFID II is coming! – part 1: designation obligations

12 Oct 2017

MiFID II is coming! – part 1: designation obligationsDeutsche Börse Group has you well prepared

European financial markets are facing fundamental changes. The level of regulation is increasing. For market participants, this translates into tightened transparency and reporting obligations for almost all kinds of transactions. A wide range of new requirements have to be fulfilled with regard to both pre-trading and post-trading. In many places, preparations are already well underway, as the next key date is just around the corner: on 3 January 2018, the revised Markets in Financial Instruments Directive (MiFID II) and the accompanying Markets in Financial Instruments Regulation (MiFIR) will take effect as applicable law. Under MiFID II and MiFIR, the previously applicable reporting and designation obligations will be extended to cover almost all financial instruments and apply to all investment firms: a massive challenge for our market participants.

Some transparency requirements will have to be met before you even enter your first order. To ensure compliance, Deutsche Börse Group’s latest releases provide all necessary features for the trading system Xetra® Classic (Börse Frankfurt and Börse Frankfurt Zertifikate) as well as for the trading architecture T7®. T7 is used for the derivatives exchange Eurex Exchange, the energy exchange EEX and Xetra trading in equities and equity-related products – thus providing for one harmonised technological basis, which allows for a swifter and more efficient implementation of new regulatory provisions.

By means of the new releases, designation obligations are implemented in the area of algorithmic trading, for instance. Participants who make use of algorithmic trading strategies are able to test their algorithms in the trading system and certify them by uploading the respective Algo ID. In addition, systems will be able to ensure compliance with a spot market-specific requirement for post-trading transparency. Thus, Xetra transactions involving at least one algorithm-generated order are designated as algorithmic transactions.

Customers have been able to test the new releases in a simulation environment since 11 September 2017 (Xetra Classic) and 25 September 2017 (T7). Clients have been able to enter Algo IDs since 18 September. Moreover, other IDs such as LEIs or Client IDs can be uploaded at this point in time. This ensures you will be ready for the start of the new regulations on 3 January 2018. 

In short: Deutsche Börse has you well prepared for MiFID II and MiFIR. 

Do you have any further questions? Please do not hesitate to contact us! For more comprehensive information on your specific area of activity and for the relevant contact data, please see the links below. 

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