MiFID II: Are You A Systematic Internaliser?

What is a systematic internaliser?

Under MiFID II¹, a systematic internaliser ("SI") is an investment firm that deals on its own account on an organised, frequent, systematic and substantial basis when executing client orders outside a regulated market, multilateral trading facility (MTF) or organised trading facility (OTF), without operating a multilateral system.

Each investment firm should assess on a quarterly basis whether it meets the criteria for being an SI. Various obligations relating to pre- and post-trade transparency are imposed on SIs. Hence, it is crucial for each investment firm to cautiously calculate whether it falls under the SI regulation.

The SI regime is currently applicable to equity-like instruments such as depositary receipts, ETFs, certificates and other similar financial instruments, and non-equity instruments such as derivatives, bonds, structured finance products and emission allowances.