Impact Of Mifid II On Derivatives Trading
This paper looks at the IT impact of the MiFID review from the point of view of a derivative trading house. The impact on a trading platform or a derivative exchange (ie. a trading venue) is only discussed when the changes to the existing way of doing business are considered or when a financial company has to become licenced as a trading venue1.
In the past three years, regulators and politicians in the most developed economies agreed on a drive to push derivative trading towards exchanges (or exchange-type electronic platforms). Derivatives are covered by the review of MiFID in three areas: (a) extension of best execution rules to non equity instruments, (b) the limit to the instruments a specific professional client (eg. pension fund or local authority) is allowed to trade and (c) post trading and transparency reports...