A major US-based Proprietary Trading firm needed to address all the new regulatory challenges introduced by MiFID II.

Under MiFID I, this firm was able to trade European markets utilising “Third Country” rules, with USA-based staff (Traders and Compliance Officers).

·        Note: The firm traded Exchange Traded Instruments on European Equities and Futures markets through European-based Prime Brokers.

A full assessment of the alternative approaches to compliance was carried out, including liaising with the firm’s industry peers, sell-side partners, and industry advocacy groups to review interpretations, different approaches, potential costs, risks, and opportunities.

As a result, the company established a regulated “Investment Firm” entity in the EU. This was fully staffed with Compliance Officers and Traders. A Compliance Framework was established governing all Technology, Algo and Model activities, including Development, Testing, and Change Management. The firm also established direct membership of the trading venues.

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