This Practice Note considers the requirements for UK systematic internalisers (SIs) including the provisions which implemented the Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) and the Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) and covers: (1) the definition of a UK SI (5) requirements for UK SIs, and (3) reforms that are being made to the UK’s post-Brexit regulatory framework.
For information on EU SIs, see Practice Note: EU systematic internalisers.
UK’s implementation of MiFID II framework for SIs
The Markets in Financial Instruments Directive (Directive 2004/39/EC) (MiFID I) introduced SIs as an alternative trading regime to regulated markets (RMs) and multilateral trading facilities (MTFs). The SI regime permits organised trading in financial instruments to be carried out internally by firms acting as a SI, provided they comply with firm quote and other requirements. In the UK, these requirements were implemented in the Market Conduct sourcebook (MAR) of the FCA Handbook, primarily MAR 6.
Following implementation of MiFID I, a smaller number of firms became SIs than the European authorities had expected. The qualitative
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Brexit definition
What does Brexit mean?
means: (a) the United Kingdom (UK) ceasing to be a member state of the European Union (EU) and/or the European Economic Area (EEA) on exit day; and/or (b) the commencement, end of[ or variation in] any transitional, trading or other arrangements from time to time between: (i) the UK and the EU and/or EEA (including during any implementation period and IP Completion Day); and/or (ii) the UK and any other country, group of countries, international organisation, bloc or body (including the World Trade Organization) in contemplation of or (directly or indirectly) in connection with the UK’s said cessation of membership;
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