Sneak peak: MiFID II Best Execution tool is on its way. FinanceFeeds to report live from London today as MiFID seminar underway

FinanceFeeds takes a look at a new MIFID II regulatory tool for best execution that will be launched in November this year, and will report live from a MiFID II regulatory symposium in London today, hosted by its developer. Are you ready for MiFID II? Here is some vital information

The entirety of the OTC derivatives sector is currently subject to a major disruptive set of circumstances, however this time rather than this being a result of a technological innovation, it will be the pan-European regulatory authorities that will create the need for considerable adjustment in infrastructure and execution practice.

MiFID II, which is the market infrastructure directive set forth by the European Securities and Markets Authority (ESMA), will be implemented in January 2018, leaving electronic trading companies across all sectors, whether exchange executing venues, institutional providers or retail FX firms, just three months to comply with the entire, and somewhat ambiguous, set of requirements that will require considerable changes to trading infrastructure and procedure.

FinanceFeeds has been monitoring the advent to MiFID II closely, and it transpired some time ago that the authorities themselves had been very inactive with regard to providing full requirements to compliance officers with regard to what exactly their procedural requirements will be post-implementation, on all subjects ranging from how products are provided to a retail audience to how post-trade processing and clearing takes place.

Cappitech’s Ron Finberg will host a MiFID II symposium in London this week

During the course of the summer, FinanceFeeds has hosted a MiFID II symposium in London, and has provided substantial information from within the regulatory technology and trade clearing sectors with regard to how brokerages should comply with the impending new rulings.

In anticipation of the new MiFID II rulings, a further development in regulatory technology will emerge, with FinanceFeeds set to attend a regulatory symposium in London this week presented by the specialist firm that has developed it.

The solution, developed by boutique financial technology company Cappitech, is designed for brokerages to measure and comply with best execution requirements set out in MiFID II.

Currently, it is still in development, with Cappitech planning to launch it in November this year.

In terms of functionality, Cappitech’s R&D executives spoke to FinanceFeeds today to detail its key features, which include the ability for brokers to input their best execution policy calculations.

Further, client executions are compared to 3rd party benchmark prices to see if they conform to the best execution policy set out in the MiFID II rulings, and results are displayed on Cappitech’s best execution platform.

The need to report exactly how trades are conducted and executed has been examined in detail with senior regulatory figures in Europe, notably Cyprus and the United Kingdom, two regions with substantial electronic trading presence.

Price quality, speed of execution, likelihood of execution, settlement size, information relating to execution venue and financial instrument traded are all aspects that will be incorporated in MiFID reporting requirements, and the amount and nature of the reported data must be published and be made available for public viewing on a quarterly basis.

Areas that will be integral to the regulatory structure will include best execution, and that the directive targets investment firms and trading venues as well as liquidity providers and systematic internalizers that operate in any jurisdiction within the European Union.

With regard to investment firms of any type which execute client orders on European and third country execution venues, regulation under MiFID II will insist that trades are reported across the entirety of the execution thread, including from third country venues outside the European Union.

In short, the European authorities will expect full and detailed publication of every aspect of trade execution, hence any errors will result in punitive measures.

Cappitech’s new solution means that brokers can filter results by asset class and review individual orders that were executed out of the policy range, and it includes a risk managment feature for brokers to detect when they are pricing clients favorably and out of the market.

The solution is available to brokerages via a monthly subscription from Cappitech.

Cappitech’s perspective is that overall, MiFID II requires brokers to not only set a best execution policy, but also put in place a way to monitor that transactions are filled correctly. This platform from Cappitech will provide the monitoring and report functions to comply.

 

Read this next

Retail FX

Banxso announces 8.7% interest rate on deposits in South Africa

“With Banxso, they can enjoy the benefits of both worlds – earning competitive interest and having the freedom to trade, all within the same platform.”

Industry News

FINRA to publish transaction details in U.S. Treasury securities

“Consistent with our longstanding practice, FINRA is introducing greater transparency in a calibrated and careful manner, benefiting liquidity and resilience in this critical market while also mitigating potential information leakage concerns.”

Institutional FX

OpenYield launches “cheap and easy” fixed income trading for brokers

“We’re on a mission to make bonds cheap and easy to trade, and are excited about the opportunity to build generational capital markets infrastructure.”

Digital Assets

Sumsub and Mercuryo publish a guide for VASPs: “Mastering Travel Rule Compliance”

“At Sumsub, we’ve concentrated our efforts on filling the gap in understanding the complexity of Travel Rule regulation and helping organizations find the best solution to stay safe and compliant while minimizing costs and avoiding potential risks of non-compliance. This guide we created with Mercuryo, our trusted partner, is the ultimate navigation tool all VASPs can consult.”

Digital Assets

Bitget Wallet Leads with Record Swap Volume & New Crypto Innovations

This week, Bitget Wallet achieved a milestone by surpassing Metamask with a record 388,757 Swap order transactions, securing the global lead. The significant 7-day trading volume, almost 68,000 more than its rival, underscores its liquidity and user trust. This robust activity signals Bitget Wallet’s prominent role and reliability in the dynamic crypto market.

Digital Assets

Embarking on a Digital Currency Journey

Imagine you’ve stumbled upon a treasure map, leading you to untold riches hidden in the vastness of the internet. Instead of gold coins and jewel-encrusted goblets, this treasure comes in the form of digital currencies, the modern-day loot coveted by many.

Reviews

Traders Union Experts Share The Trading Analyst Review For 2024

Navigating options trading in rapidly shifting markets poses a considerable challenge. This is where options trading alert services become invaluable. They aid traders in keeping abreast of evolving opportunities and market trends. In this assessment, Traders Union experts scrutinize The Trading Analyst alert service to ascertain its efficacy. 

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

<