Page History

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• 'Delegated acts', drafted by the European Commission (EC) on the advice of ESMA
• 'Technical Standards', drafted by ESMA and approved by the EC.

The Main Changes to MiFID I

MiFID II establishes provisions that the author's state are aimed to ensure theat High-Frequency Trading (HFT) does not have an effect on market 'quality or integrity' by implementation of the following requirements:

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• LEI: Defined by ISO 17442. Refer to http://www.lei-lookup.com for a definitive list of valid LEIs
• MIC: Defined by ISO 10383. Refer to https://www.iso20022.org/10383/iso-10383-market-identifier-codes for a definitive list of valid MICs.

Waivers and Flags

Pre-Trade Waivers and Flags are specified to indicate other details relating to the trade:

• LargeInScaleWaiver - A Pre-Trade Block Size waiver indicator.
• IlliquidInstrumentWaiver - A Pre-Trade Illiquid Instrument waiver indicator.
• SizeSpecificWaiver - A Pre-Trade Size-specific (trade of substantial size etc.) waiver indicator.
• LiquidityProvisionFlag - Indicates that the Order is part of a liquidity provision activity.
• AlgorithmicOrderFlag - Indicates that the Order was generated by algorithmic trading.
• PackageTradeFlag - Indicates that the Order is considered a Package/aggregated transaction for reporting purposes. Includes Swaps, Blocks and Batches.
• PackageID - related to the PackageTradeFlag. An identifier assigned to a collection of trades so they may be analysed as a single unit.
• SystematicInternaliser - typically the Segment MIC code (as per ISO 10383) of the message sender, indicating it is a Systematic Internaliser.
• RiskReductionOrderFlag - In the context of ESMA RTS 22 Article 4(2)(i), signifies whether or not the Order is a transaction 'to reduce risk in an objectively measurable way in accordance with Article 57 of Directive 2014/65/EU'.
• TradingCapacity - DEAL: Firm Deals on own account; MTCH: Firm trades in a matched principal capacity; AOTC: Any other trading capacity (e.g. Agency).
• NonPriceFormingTrade - Transactions where the exchange of financial instruments is determined by factors other than the current market valuation of the financial instrument as listed under Article 13 Flags (Used for orders that are large in scale, held in an order management facility pending disclosure, actionable indications of interest in request-for-quote waiver indicators are likely to be the illiquid instrument and the specific size).Algorithmic Order Flag, set if the order was algorithmic.

Excluded from Scope

FX Forward contracts are outside the scope of MiFID II if they satisfy all of the following conditions: 

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