Market Readiness - MiFID II

Rules & Regulations

Information about Member Readiness

An overview of readiness activities to be expected prior to the application of MiFID II and MiFIR.

Market Readiness Activities

MiFID II will introduce several new requirements for members and participants of Nasdaq’s trading venues. In turn these requirements will trigger a number of preparatory activities prior to implementation as well as routines and procedures that will need to be performed continuously or periodically.

Technical Updates

The implementation of new MiFID II related system functionalities is expected to occur throughout 2017 and a number of these readiness activities are associated with required system updates.

Testing and Other Technical Activities	Members Impacted	Timeline	Additional Information
INET AND GENIUM INET SYSTEM UPDATES All updates to INET and Genium IET systems, including API changes	All ISVs and members using in-house solutions. All exchange members	Testing activities have started	Details in the Technical information pages for INET and Genium INET
APPLICATION CONFORMANCE TESTING Mandatory conformance testing of all order entry protocols INET: OUCH/FIX Genium INET: OMnet/FIX	All ISVs and members using in-house solutions	September/October	Details available in Technical Information pages
TRANSACTION REPORTING Onboarding and testing of tool for supplying data or enriching Nasdaq's transaction data	All exchange members that are non-investment firms under MiFID	Onboarding and testing scheduled for 2017 Q4	Will be published at a later date
ORDER RECORD KEEPING Order Record Keeping activities	All exchange members	Ongoing testing activities throughout 2017	See Technical Information page for more details
POSITION LIMITS REPORTING Onboarding and testing of tool (TRACK) for supplying data or enriching Nasdaq's data	All Commodities participants	Onboarding and testing scheduled for 2017 Q4	Will be published at a later date
APA Testing of APA/OTC Trade Reporting tool	APA clients	Testing available on INET starting in June	See INET Technical Information page for more details
MARKET DATA PROTOCOLS Coordination and testing support of changes to market data protocols INET: ITCH/GCF Genium INET: OMnet/GCF	Exchange members, market data vendors and ISVs	Testing activities are ongoing	See Technical Information page for more details

Details of these technical activities are published once the information is available on the Technical Information page and in IT-Notices.

Member Readiness

In addition, there are other ongoing mandatory member readiness activities required by MiFID II. Below is a preliminary list of such activities. As information is available, Nasdaq intends to provide detailed information on the implementation of these readiness activities directly to members and market participants. It should be noted that the information below is subject to change. Additionally, this list is based on requirements placed on Trading Venues and is not an exhaustive list of MiFID II requirements placed on Investment Firms.

Member Certification and Data Collection Activities		Members Impacted	Timeline
COLLECTION OF LEI	Members to provide their LEI in the member portal	All exchange members	2017 Q2
MiFID INVESTMENT FIRM STATUS	Members to provide their firms' MiFID Investment Firm status in the member portal. The status will determine the requirement for the trading venue to perform Transaction Reporting on behalf of members that are not MiFID Investment Firms.	All exchange members	2017 Q2
TRADER IDs	a) Reconciliation of registered trader lists in member portal to ensure that all traders are issued a Trader ID	a) All derivatives and commodities exchange members	a) 2017 Q2-Q3
	b) Once Trader IDs are issued, members are to populate their trading systems with the Trader IDs in order to have the data available on order entry	b) All derivatives and commodities exchange members	b) October - November 20^th
	c) Notify Nasdaq of the members firm's requirements for additional, non-personal Trader ID's (Algo, DMA, Routing)	c) All derivatives and commodities exchange members	c) October - November 20^th
DIRECT ELECTRONIC ACCESS	a) In Member Portal, confirm if AOR users should be tagged as DMA or non-DMA	a) All cash equities exchange members with AOR users	a) September - October
	b) In Member Portal, confirm DMA flow under MiFID II and request DMA Trader ID's	b) All non-equities exchange members providing DMA	b) September - October
	c) Members to be contacted by Nasdaq to confirm compliance to new rules	c) All sponsored access providers	c) September - October
ALGO SELF-CERTIFICATION	Using a self-certification form in the member portal, members to certify that the algorithms they deploy have been tested to avoid contributing to or creating disorderly trading conditions, according to the requirements of RTS 7	All members engaged in algorithmic trading	October - November
APPLICATION CONFORMANCE MEMBER SELF-CERTIFICATION	After conformance testing of application has been completed members to use the member portal to select the trading application they are using	All trading venue members	October
INDIRECT CLEARING	a) Members to request new account for indirect clients	a) All clearing members with indirect clients	a) 2017 Q3
	b) Transfer of position and collateral to new account	b) All clearing members with indirect clients	b) 2017 Q4
DUE DILIGENCE	Due diligence self-certification of compliance with the rules of the trading venues, according to the requirements of RTS 7	All trading venue members	To be determined

Nasdaq’s Member Readiness team started contacting members individually in May regarding the Member Certification and Data Collection activities. For more information, contact MiFID2Readiness@nasdaq.com.

It is important to note that some of these activities will be ongoing once MiFID II goes into effect. Member rule books will be updated accordingly. Drafts of proposed rule changes are available here.

DISCLAIMER: All information contained herein is obtained by Nasdaq from sources believed to be accurate and reliable. However, the Markets in Financial Instruments Directive and Regulation and related level 2 and level 3 texts (“MiFID II/R”) have not yet been fully adopted and/or implemented. Neither Nasdaq Nordic Exchanges nor any of its affiliates or subsidiaries (collectively “Nasdaq”) assumes any responsibility for any errors or omission contained herein. The information herein is not intended to provide legal advice on any matter, nor is it intended to be comprehensive. All information is provided “as is” without warranty of any kind. While the information has been prepared on the basis of the best information available, Nasdaq accepts no liability for decisions taken by any party, based on this information.

NASDAQ MEMBER PORTAL TO FACILITATE MIFID II MARKET READINESS

Nasdaq has deployed a member portal to make member specific information easily available and to facilitate interactivity with members.

The Nasdaq Member Portal will provide customer specific services related to memberships, users, traders, accounts, ports and configuration. The services will be available to members and other customers of Nasdaq.