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Using Visual Analytics to Support MiFID II Compliance

Best execution under MiFID II is a holdover from its predecessor, MiFID I, but with two kickers. First, it’s much broader in scope, applying to all asset classes versus MiFID I’s equities-only focus. Second, and perhaps more onerously, it’s more forceful: investment firms have an obligation to take “all sufficient steps” to execute client orders to ensure the best possible outcome for their customers, compared with MiFID I’s mere “all reasonable steps”.

MiFID II also broadens the scope of what cap markets firms need to track, including any financial instrument which has traded on any trading venue (not just regulated venues as in MiFID I) and instruments that have had a request for admission to trade on a trading venue. Essentially, you must maintain a record of every order, execution, and transaction event. Traders and managers should also be analyzing all this data in real time. Waiting for end-of-day reports simply will not cut it, as too much can happen during the trading day that can create compliance problems.

We know that failing to comply with MiFID II is going to be expensive. Regulators are primed to come down hard on banks and other trading firms that are unprepared when the new regulations go into effect next month.

Real-time visual analysis is realistically the only way for compliance officers and managers to make sense of all the data associated with all the trades taking place under their roofs. Being able to spot exceptions and anomalies quickly is absolutely essential in order for trading firms to comply with MiFID II regulations while simultaneously reducing risk and improving profitability.

Watch this video to see how trading firms can use visual analytics to support more effective – and cost-effective – MiFID II compliance: