Fintech Focus: MiFID II and Best Execution for Securities Finance Transactions

Finadium
January 2017

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This Finadium Fintech Focus report provides a summary of business process and technology considerations related to compliance with new Best Execution requirements for Securities Finance Transactions (SFTs) under the Markets in Financial Instruments Directive (MiFID II). This report should be read by product and technology development managers responsible for securities finance technology across pre-trade, trade processing, and post-trade reporting systems/services.

MiFID II and the related Markets in Financial Instruments Regulation (MiFIR) cover: the conduct of investment firms; authorization requirements for regulated markets; reporting; trade transparency; determining what financial instruments are eligible for trading; and securities finance. While financing has few direct references in MiFID II and MiFIR, the indirect references are far, wide, and much more important. Securities finance market participants may well find that they need to rethink some parts of their business models entirely.

This report is 17 pages with one exhibit.

TABLE OF CONTENTS
■ Executive Summary

■ A Summary of MiFID II Best Execution for Securities Finance
– Which Firms are Impacted by MiFID II?
– MiFID II for Securities Finance
– MiFID II’s Best Execution Criteria

■ Business and Technical Considerations
– Process Flow
– Data Requirements

■ Commercial Opportunities
– Further Resources

■ About the Author

■ About Finadium Technology Focus

■ About Finadium