Rules and Regulations

Equity Derivatives

MiFID II will impact Equity Derivative markets in several areas and the first changes to functionalities are scheduled for the fall of 2016.

The Regulation and Directive introduces provisions in different areas: 

  • Market efficiency and resilience: focusing on areas like business conduct rules, transparency regimes, transaction reporting, record keeping, etc.
  • OTC derivatives markets: aiming at completing the EMIR regulation by introducing a classification of liquid products, trading obligation criteria, indirect clearing and STP.
  • Competition: focusing on favoring competition and lowering transaction costs with a regime for accessing CCPs and trading venues. 
  • Market Microstructure: affecting market making, algorithmic trading, order-to-trade ratio, clock synchronizations, direct electronic access, and other related areas. 

At the heart of these provisions lie the definition and classification of trading venues in Regulated Markets (RM), Multilateral Trading Facility (MTF), Organized Trading Facility (OTF) and Systematic Internalisers (SI). 

Nasdaq has launched a MIFID II implementation program, which aims to efficiently introduce functionality changes to its members and stakeholders. Nasdaq will update members on the implementation timeline via these web pages and in addition to forums such as Derivatives Market Council, Clearing Council and IT-Forums.

For the Nordic Equity Derivatives Markets, the main areas impacted are:

Pre-Trade Transparency
  • All listed equity derivatives products are considered liquid and are subject to pre-and post-trade transparency requirements (RTS 2).
  • The pre-trade transparency regime will result in the introduction of a minimum block trade size expressed in number of contracts in accordance to Pre-trade LIS values in RTS 2 Table 6.3.
  • The Voice Trading System operated by the Exchange Broker desk will be subject to pre-trade transparency requirements in accordance to RTS 2 (i.e. full pre-trade transparency for order sizes lower than SSTI and publication of indicative prices for order sizes between SSTI and Pre-trade LIS thresholds).
  • Nasdaq will start publishing the aggregate number of orders on each price level in market-by-level data feeds.

Post-Trade Transparency Regimes:
  • The trading system will validate and enforce the minimum size on trade reports eligible for deferral in accordance with post-trade LIS thresholds.
  • All the legs of a multi-leg trade report or combination shall be deferred if at least one of the legs is eligible for deferral.

Volatility Halts

Nasdaq will introduce Circuit Breaker for index futures (H2 2016) and automatic suspension of trading of stock derivative classes in conjunction with circuit breaker/trading suspensions triggered on the underlying instrument.

Pre-Trade Validations

Nasdaq already operates central price collars (during continuous trading only) and maximum order volume checks for exchange-traded equity derivatives, but a number of adoptions will be required to comply with the new rules including:

  • two-sided price limits; 
  • price limits validation of resting orders; 
  • price limits during call auctions; 
  • new maximum order value limit; and 
  • use of theoretical reference prices.

Market Making Programs
  • Members will need to enter into market making agreements if they meet the MiFID II market making definition.
  • Specific incentives will be introduced for stressed market conditions.
  • Nasdaq will send notifications of a stressed market condition via existing accessible channels.
  • Publication of terms of market making agreement on the web sites (including list of market makers).

Order-to-Trade Ratio (OTR)
  • A regime to monitor OTR will be introduced for the Nordic Equity Derivatives market, including sanctions for violations.

Algorithmic Trading
  • Identification of algorithms and flagging of transactions conducted by algorithms.

Best Execution
  • Nasdaq will provide the execution quality reports required by MiFID II.

Services for OTC Trading and Systematic Internalisers (SI)

Nasdaq plans to roll out part of its MiFID II program during the second half of 2016. The roll out will focus on the introduction of circuit breaker functionality for the index futures along with enhancements to current pre-trade controls. 

Updates will be published on this site and will include news on service offerings and MiFID II/MiFIR implementation details as they become available. Members are encouraged to reach out to their Key Account Managers directly with any questions or concerns regarding MiFID II. You may also contact the Nasdaq implementation project directly, via

CountryKey Account Managers
Nordic Sales - Stockhom

Stefan Pinter
Sales Director
+46 8 405 6459

Felix von Bahr
Account Manager
+46 8 405 6495

Nordic Sales - Helsinki

Riikka Leppänen
Director, Customers & Sales
+358 9 6166 7231

Teemu Mörsky
Account Manager
+358 9 6166 7377

Nordic Sales - Copenhagen

Sylvester Andersen
Sales Director
+45 33 77 0350

Allan Hvalsoe-Olsen
Sales Director
+45 33 77 0383

Nordic Sales - Norway
Pål Sætre
Sales Director
+47 9078 7694
Cash Trading - Iceland
Magnus Hardarson
Head of Trading
+354 525 2853
European Sales

Julian Butterworth - London
Head of European Sales
+44 203 753 2195

Henning Kruse - Copenhagen
Sales Director
+45 33 77 0381

Richard Pafford - London
Sales Director
+44 203 753 2196

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