MiFID II is designed to build upon the framework of MiFID I, addressing perceived gaps and dealing with market developments since MiFID I was penned over a decade ago. Although there are only a few headline changes to the activities and instruments to which MiFID applies, and the lists of investment services and activities and financial instruments remain largely unchanged, there are plenty more nuanced changes that need to be considered.

Authors: Tim Dolan Charlotte Collins

Investment services and activities

Some of the key changes relate to market infrastructure. One obvious change is the addition of the new investment activity, operation of an organised trading facility (OTF). This is to reflect the fact that a new trading platform, the OTF, is being introduced, to sit alongside the other MiFID trading venues: regulated markets and multilateral trading venues. For further details on the new OTF trading platform, please see our alert on trading venues.

Further, the definition of “systematic internaliser” (essentially, a bilateral trading venue) has been widened to include more objective criteria than under MiFID I. It is expected that this will result in more than the present handful of firms being caught by this definition and needing to comply with the consequent obligations. We examine the change to this definition in our alert on trading venues.