Industry Report: Systematic Internalisers - Challenges and Opportunities in a MiFID II Era

Posted 31st October 2018

Get this in-depth industry report to learn more about the impact of the MiFID II systematic internaliser (SI) regime.

Vela, in association with The Realization Group, has compiled a comprehensive report into the growing influence of systematic internalisers (SI) and how data is changing the approach of investors and financial traders post-MiFID II.

With input from key industry experts from Vela, Citi, Sun Trading, Rosenblatt Securities and Aquis Exchange, this MiFID II report provides invaluable insights into the future of liquidity provision in the Financial Services industry, the role of systematic internalisers, how buy-side and sell-side trading firms are evolving their approaches, and why transparent and granular data will dictate decision making around brokers and venues and ultimately help achieve the best result for the end-investor.


What you’ll learn from this MiFID II report:

Having outlawed broker crossing networks (BCNs) and limited dark trading since its introduction in January 2018, MiFID II has broadened the scope of the systematic internaliser (SI) regime, with firms now having the option to execute trades via a number of new systematic internalisers. Here are some questions related to SIs and trading venues, which this industry report addresses:

  • Which factors are contributing to the success of different SIs?
  • What kind of models are SIs building for attracting order flow?
  • How are firms addressing the challenges connected to sourcing prices and trading on this proliferation of trading venues?
  • What are the key factors that support real-time price discovery and help enable best execution across these trading venues?
  • How have MiFID II’s requirements regarding pre-trade and post-trade transparency shaped the way SIs operate?
  • How "smart" are smart order routers starting to become?
  • What are the cost implications for buy-side and sell-side firms under the new SI regime?


Some key takeaways from this industry report into systematic internalisers:

  • Firms expect reporting via MiFID RTS 27 to become more accurate once data reporting and aggregation processes have bedded in
  • Trading firms are initially submitting small orders to SIs, before committing gradually more flow, following satisfactory scrutiny of TCA (transaction cost analysis) data
  • SIs are just one of a number of emerging solutions aiming to bridge the gap left by BCNs
  • If the SI market share grows too fast and becomes too large, it could weaken public confidence in the European equity market’s price discovery process
  • Although a complex challenge under MiFID II, there’s a renewed industry focus on achieving best execution for the end-investor
  • The buy-side can make better use of data reporting to determine routing decisions
  • Buy-side trading firms will need to hold the electronic liquidity providers accountable for the liquidity they provide


Who is this industry report for?

If you’re a Head of Trading or a Head of Market Structure, this industry report will give you a greater understanding of the role of SIs in the post-MiFID II landscape. However, there are plenty of great insights for any Financial Services trading professional.

Fill out the short form on this page to download this intriguing report as a PDF.​


Contributors to this Systematic Internalisers report

  • Ollie Cadman of Vela
  • Citi’s James Baugh
  • Sun Trading’s Jamal Tarazi (Sun Trading is now part of Hudson River Trading)
  • Rosenblatt Securities’ Anish Puaar
  • Alasdair Haynes of Aquis Exchange

Coordinated by Chris Hall and Mike O’Hara of The Realization Group.

Industry Report: Systematic Internalisers - Challenges and Opportunities in a MiFID II Era

To receive the PDF document, please fill out your details in the form below.

Enter a search term and hit return when you’re ready