The start of the rules around Systematic Internalisers for non-equities under MiFID II has been delayed, following the release of this press release and this updated questions and answers document from ESMA.

A systematic internaliser is defined under MiFID II as:

an investment firm which, on an organised, frequent systematic and substantial basis, deals on own account when executing client orders outside a regulated market, an MTF or an OTF without operating a multilateral system;

The definition of “frequent, systematic and substantial” is defined by certain thresholds for non-equities, including derivatives and emissions allowances, the level and market size of which is to be defined by ESMA. Some of these figures will not be published until August 2018 and the rules will thus not start until September 2018.

Systematic Internalisers are required to abide by certain organisational rules, and also fully comply with “transparency reporting” under MiFID II.