Liquidnet Market Intel
Making MiFID II Work: Liquidity (Equities)
Comparison of execution
venues / types
REGULATED
MARKET (RM)
MULTI-LATERAL
TRADING FACILITY (MTF)
SYSTEMATIC
INTERNALIZER (SI)
•
•
Regulated Exchange
•
Operated by an investment firm
or a market operator
•
•
•
Published non-discretionary
rules of access for members.
Brings together multiple
third-party buying and selling
interests in fair and orderly
trading to ensure efficient
execution of orders
•
•
Are not allowed to trade in a
principal capacity
Rules on access to the MTF to
be publicly available and nondiscriminatory
SIs are investment firms which,
on an organised, frequent,
systematic and substantial
basis, deal on own account
by executing client orders
outside an RM, MTF, OTF,
without operating a multilateral
system. Technically, an SI is an
instrument rather than the firm
itself.
•
Are not allowed to trade in a
principal capacity
•
•
Are not allowed to engage in
matched principal trading.
An SI must publish firm bid/
offer quotes up to SMS for liquid
instruments which must reflect
current market conditions
•
For illiquid instruments the SI
must disclose quotes to clients
on request
•
Importantly, an SI should not
consist of an internal matching
system which executes client
orders on a multilateral basis
(MTF activity)
Brings together multiple
third-party buying and selling
interests in fair and orderly
trading to ensure efficient
execution of orders
•
Are not allowed to engage in
matched principal trading.
•
Systems and controls in place
to ensure that the performance
of its activities are adequate,
effective and appropriate.
•
•
Minimum of 3 members/users
•
Systems to recognize and
mitigate risks to operations
•
Sound management of
technical operation of the
system
Specific arrangements in
place to identify and manage
conflicts of interest
Making MiFID II Work is our comprehensive content, learning, and resource programme. We’ll be publishing content
on a regular basis throughout the year, designed specifically for the buy side.
For more information about MiFID II, how Liquidnet can help you prepare, or to access Rebecca Healey’s full MiFID II
research papers, insight, and workshops, please reach out to your Liquidnet coverage or email [email protected].
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Please note, the information presented here may change after Level 3 text is released.
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