Seeking Clarity on MiFID II Inducement Trading Rules

Seeking Clarity on MiFID II Inducement Trading Rules

With MIFID II’s rules on inducements now a reality, buy-side firms are paying close attention to the costs associated with their front-office trading platforms and analytics. The EU regulation, which took effect on Jan. 3, could draw scrutiny to execution services and tools that are sponsored by brokers, such as order management and execution management systems as well as trade analytics.



With MIFID II’s rules on inducements now a reality, buy-side firms are paying close attention to the costs associated with their front-office trading platforms and analytics.

The EU regulation, which took effect on Jan. 3, could draw scrutiny to execution services and tools that are sponsored by brokers, such as order management and execution management systems as well as trade analytics.

“In order to align with MiFID II’s inducement regulations, the buy side has an obligation to understand what a third party is paying for and what is being paid for on their behalf,” said Spencer Mindlin, analyst at Aite Group on a recent webinar.

While MiFID II has been focusing on unbundling research payments from executions, there is a lot of ambiguity around the industry practice of brokers paying for vendor-sponsored buy-side client connectivity (i.e., FIX lines) and how that is going to align with MiFID II inducement regulations, said Mindlin on the webinar.

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FlexTrade is a global leader in broker-neutral, execution and order management trading systems for equities, FX, options, futures and fixed income. A pioneer in the field, FlexTrade introduced the first trading system that allowed clients to control and customize their proprietary algorithms while maintaining the confidentiality of their trading strategies. Change is the only constant in electronic trading. That's why FlexTrade is continuously upgrading its products and services. All can be tailored to meet the demanding requirements of a global client base of more than a 225 buy- and sell-side firms.
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