MiFID II

1
Hello traders, Hello coders,
From early 2018 how are you going to manage / track records / your trades? How will you inform your broker of EAs and strategy you use?
Wondering...
Simple page to en light and discuss that point.
Tomcat98

For those in need of infos:

As January 3, 2018 approaches, FX industry participants are busy reading through the new financial laws of “Markets in Financial Instruments Directive” (MiFID 2) in an attempt to understand how these will affect them going forward. Originally, MiFID was created following the 2008 financial crisis in an effort to standardize the regulatory disclosures for particular markets.
MiFID 2 came along with a revised set of standards which will enforce transparency, enhance investor protection and expand reporting to regulators, effectively changing the way that Europe’s secondary markets function. The significance of these changes should not be underestimated as the regulatory expectations of higher quality data sets will most likely lead to more regulatory issues and fines. In a continuation of Advanced Markets’ ongoing, fact-finding series about MiFID 2, (High Impact Changes), I will be exploring the impact of the pending regulations, specifically on how they relate to those engaged in Algorithmic Trading – High Frequency Trading (HFT).
The broad Algorithmic Trading definition, incorporated within MiFID 2, was intentionally used to capture a wide array of clients and firms which wouldn’t have been placed within this category before. This new rule defines Algorithmic trading as follows:
Article 4(1)(39) of MiFID II, pursuant to which algorithmic trading is “trading in financial instruments where a computer algorithm automatically determines individual parameters of orders such as whether to initiate the order, the timing, price or quantity of the order or how to manage the order after its submission, with limited or no human intervention, and does not include any system that is only used for the purpose of routing orders to one or more trading venues or for the processing of orders involving no determination of any trading parameters or for the confirmation of orders or the post-trade processing of executed transactions.”
Continuing, Article 4(1)(40) of MiFID 2 has enacted High Frequency Trader as a subset of the Algorithmic Trading definition and will be subjected to the same controls and requirements with the ADDITIONAL requirements for an infrastructure designed to minimize network and other latencies including high-speed DEA, proximity hosting or collocation for algorithmic order entry that on average has:
(a) at least 2 messages per second with respect to any single financial instrument traded on a trading venue;
(b) at least 4 messages per second with respect to all financial instruments traded on a trading venue.

Should your particular trading style, or methodology, fall under any of the above-mentioned HFT definitions then you will need to take action. If your firm is deemed as involved in “Algo” / HFT trading, by definition of MiFID 2, then you are required to become authorized as an investment firm and to comply with compulsory market-making rules. The rules ensure that your “Algo” system has appropriate controls which:
a. prohibit sending erroneous orders during operations
b. does not contribute to disorderly markets
c. does not violate the trading venues rules
Also, High Frequency Traders will be required to store all time-sequenced records in detail for a minimum of 5 years. These stored records, which will be made available to the regulatory body, must encompass the following details:

Person in charge of each algorithm
Description of each decision made or trade by the algorithm
Compliance and Risk Controls
...


Re: MiFID II

2
Hello,
And now coming from my broker: (No name necessary)

`As a result of recent changes to the EU Legislation, we are required to contact all of our clients URGENTLY to request the Identifier for your Robot . This can take the form of a Name or a Number that you should be able to obtain from your Robot provider
Please consider this email with care as this new legislation means that you will not be able to trade from 3rd January unless you provide this identifier.`
Wondering about next question... What is your exact strategy? Loolll

Tomcat98

Re: MiFID II

3
Tomcat98 wrote: Thu Dec 14, 2017 9:07 am Hello,
And now coming from my broker: (No name necessary)

`As a result of recent changes to the EU Legislation, we are required to contact all of our clients URGENTLY to request the Identifier for your Robot . This can take the form of a Name or a Number that you should be able to obtain from your Robot provider
Please consider this email with care as this new legislation means that you will not be able to trade from 3rd January unless you provide this identifier.`
Wondering about next question... What is your exact strategy? Loolll

Tomcat98
So let us wait till all they want,have done
do you think EU legislation favoring brokers or next level financial institutions/LPs
Indicator is just a tool.

Use it only if it can benefit you. Leave it if you don't know how to use it optimally.

Re: MiFID II

4
mntiwana wrote: Thu Dec 14, 2017 9:37 am So let us wait till all they want,have done
do you think EU legislation favoring brokers or next level financial institutions/LPs
Well, difficult to answer who will be in favor...even if the goal of the regulator is transparency which is good.
Retail trader is often at the beginning of the food chain. As you know at peak volatility events (NFP, FOMC, EEC talks...) some LPs remove their Bids and Asks leaving a shrinking volatility till all comes back to normal, quotes are delayed. Some platform freeze their quotes always staying on the good side. Establishing proof of order execution according to an algo to regulators seems very difficult with that profile. Will broker log book will be enough?
Sincerely.
Tomcat98


Re: MiFID II

6
Op Ed:
Where to license your FX brokerage in 2018
– Stick with the established and avoid the bogus



2018 should be a year of quality and sustainability. Here is why it is important to avoid the seemingly cheap and easy jurisdictions and to go the full way and be part of the high quality establishment.

Today represents the monumental implementation of a very comprehensive infrastructural directive for electronic trading companies whose commercial base is in the European Union and Britain, that being the much discussed yet scantly understood MiFID II.



Info : Finance Feeds
Always looking the GREAT, never left GOOD Point...

Re: MiFID II

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Hey Tomcat98,
I just saw this thread and it got me wondering - why in the blue sky your broker or the regulator needs you to identify your robot. It is not that it cannot see it in the back-office tools or log files. Did you receive from your broker any logical explanation about that?


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