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MiFID II – How is it going? – Position limits, algos and more

As week 9 of MiFID II starts, many are getting used to the rules being in force. However there are many questions still unanswered: It has been reported that the FCA has received many enquiries, both in the run up to and since the start of MiFID II, as reported here on the Investment Week web site.

Many are expressing concern on the impact of position limits, in particular in terms of the metals markets, as reported in this article on the IFLR web site.  The impact that MiFID II has on commodity and energy market participants is now something that those considering corporate activity need to consider as outlined in this article on the Lexology web site by Reed Smith. Those considering such activity will need to take into account any impact of MiFID II, such as continuing use of the Ancillary Activity test, position limits and others as part of due diligence.

A few weeks ago, the FCA issued a report on the application of MiFID II to algorithmic trading (see here), which can also be applied to non MiFID companies. The rise of artificial intelligence and machine learning, gives rise to an ever increasing number of regulatory questions. This article on the Computer World web site looks at many such implications,. which we will return to on this blog over the coming weeks.

In the meantime, Jeff Sprecher, CEO of ICE has expressed optimism on the uptake of ICE’s services on analytics and others due to MiFID II, as reported here on The Trade News. Concern is still expressed on the impact of the open access rules, which have been delayed for many  (see here).

The rules around trading obligation part of MiFID II, where certain products must be traded on a financial venue, are now being considered for application in Singapore. Last week Singapore’s MAS regulator issued this consultation paper on the topic. This report on the Straits Times web site reports on the issue.

There is still much to do, as reported here on the Finance Magnates web site, which amongst other things mentions the need to  move to more intelligent reporting, which was the topic of an FCA Call for Input last week (see here). We can expect more news on this topic over the coming weeks.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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