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MiFID II/MiFIR

MiFID II/MiFIR

Impact on the derivatives market

The revised Markets in Financial Instruments Directive (MiFID II) and the accompanying Markets in Financial Instruments Regulation (MiFIR) regulate the provision of investment services in a multitude of financial instruments at regulated trading venues as well as in OTC trading.

With the upcoming MiFID II regulation there will be an increased requirement on investment firms to prove Best Execution. Eurex wants to provide its trading participants an electronic, selective RFQ platform, which is Eurex´s solution to help trading participants to meet this challenge. For this purpose, the T7 system will be enhanced with a selective RFQ platform to negotiate off-book transactions electronically. For further information, please visit the Eurex RFQ platform website.

 
 

The new legal framework will be applicable starting  3 January 2018. 

Eurex works towards achieving full MiFID II compliance well ahead of the application date. Any technical changes required to achieve compliance with the MiFID II/MiFIR regulations will be implemented with the T7 Release 6.0. This release will go live on 4 December 2017, while members will be able to test the new T7 6.0 version in the simulation starting 25 September 2017. Please refer to the “Eurex Exchange Roadmap 2017 – Timeline” presentation for full details. More information about all T7 Release 6.0 introduction details also covering non-MiFID II related scope items are provided here:
http://www.eurexchange.com/exchange-en/technology/t7

Apart from the technical changes required to ensure MiFID II compliance, this website will keep you also fully informed on all MiFID II related changes in Eurex systems and processes that might impact market participants. For further regulatory information, please also visit our Deutsche Börse Group website.

All Eurex Exchange's MiFID II/MiFIR  & T7 release 6.0 readiness news are published here. In case you want to align on the implementation of MiFID requirements or have further information needs, you may contact our dedicated MiFID II project team via customer.readiness@eurexchange.com. You can, of course, also always contact your Key Account Manager.

 

Reporting

With MiFID II/MiFIR the reporting obligations for trading members as well as for trading venues will increase tremendously. In this section, we will provide you with information about the new reporting requirements.

Details about the upload of Short Codes and Algo ID´s can be found under the section „Client & Member Reference Data“.

 

Deutsche Börse MiFID II regulatory reporting solution

To comply with the MiFID II/ MiFIR reporting obligations, Deutsche Börse Group has created the Regulatory Reporting Hub (RRH). The RRH offers a wide range of services, which will help members to meet regulatory obligations. Further information can be found here.

 
 

Transparency

MiFID II/MiFIR updates the pre- and post-trade transparency regime for shares and ETFs introduced with MiFID I and introduces a mandatory pre- and post-trade regime for non-equities.

Market Making

With MiFID II the regulatory framework for Market Making is further enhanced. As of 3 January 2018, Market Making will be covered under public law. Market Makers will need to be formally admitted at Eurex as Regulatory Market Maker. Eurex will keep the current model for commercial Market Maker incentives (rebates) that operates under a civil law framework. This model will be renamed into Liquidity Provision.
 

HFT/Algo

With the application of MiFID II/ MiFIR on 3 January 2018, Eurex will implement a variety of IT requirements in order to comply with the regulatory obligations set out for Algorithmic Trading and HFT in the Delegated Regulation.

The requirement that trading members using algorithmic trading technology identify the orders they submit algorithmically to the national competent authority was already introduced with the German HFT Act in 2013. With MiFID II this systematic will change. Now, not only the execution but also the investment decision done by persons and algorithms must be identified accordingly.

 

Client & Member Reference Data

To comply with the MiFID II reporting obligations, trading participants will have to provide reference data to the trading venues. In this section, you will find several guides, which explain how to provide the respective data to Eurex.

 
 
 

Transaction reporting requirements for non-MiFIR firms

According to MiFID II/MiFIR, investment firms are obliged to report certain transaction information to their NCA. Please find here detailed information about the requirements in relation to transaction reporting.

 

Third country firm authorisation requirements

With the application of the revised Markets in Financial Instruments Directive (MiFID II) and the associated Markets in Financial Instruments Regulation (MiFIR) on 3 January 2018, the scope of trading activities requiring authorisation as investment firm will be extended.

 

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