Firms will need to publicly report Actionable Indications of Interest (AIoIs or firm prices)and executed trades. ‘Off venue’ trades are required to be published through an Approved Publication Arrangement (APA), whereas ‘on venue’ reporting of prices and trades will be the obligation of that trading venue.
Trades on all financial instruments willneed to be reported to the client’s National Competent Authority. Reports require 65 fields of economic terms and static data. NB All transactions reported will require an LEI (Legal Entity Identifier).
Reference data is required as the input to transparency and transaction reporting rules and to populate some of the reportable fields. The new transparency regime will provide new streams of data to be analysed as part of a firm’s investment and execution process.
MiFID II outlines rules for provision and receiptof investment research that should be unbundled from execution.
Market participants wishing to execute multilaterally must do so on a trading venue. Certain trades will be subject to both pre-trade and post-trade transparency.
Take all sufficient steps to obtain, when executing orders, the best possible result for their clients — taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other relevant consideration.
Records shall be kept of all services, activities and transactions undertaken by investment firms to support enforcement actions under MiFID II, MiFIR and MAD/MAR for a minimum of five years. Firms are required to provide transparency into trade life cycle — they must have trades and communications (incl. voice) “readily available” and provided upon client’s and regulator’s request. Firms are required to increase monitoring of and surveillance on marketing and distribution activities for prohibited or restricted financial instruments.
MiFID II requires firms to plan for client engagement. Firms need to demonstrate that the financial instruments sold are fit for their client's risk appetites and market knowledge, supported by a clean audit trail.