Liquidnet rolls out Best Ex Replay to help with MiFID II compliance

Liquidnet, an institutional trading network, has launched Best Ex Replay to help meet regulatory reporting requirements such as MiFID II.

The solution is the latest addition to the Liquidnet Virtual High Touch suite powered by data and analytics from OTAS Technologies.

Best Ex Replay will enable traders to recall precise market conditions to explain the context of execution decisions, investigate orders that experienced exceptional market conditions. This helps their firm meet regulatory reporting requirements such as MiFID II and also enables traders to provide detailed execution feedback to Portfolio Managers.

Traders use Best Ex Replay to research the trading conditions of a security on a specific date. They are then presented with a description of exceptional trading conditions during that day, market microstructure charts and analysis covering return, volume, liquidity, and spread. They can also run a Performance Report on an execution based on order details that they provide, which is particularly useful with MiFID II best execution requirements.

The recent introduction of MiFID II in Europe has accelerated global regulatory pressure on firms to deliver constant, detailed, and systematic best execution analysis,” said Mark Pumfrey, head of Liquidnet EMEA. “Best Ex Replay delivers meaningful execution and market information in a convenient and timely way—a broker-neutral solution covering most equity names in the US, Canada, developed Europe, Hong Kong, and Australia, whether or not an order is executed on Liquidnet.”

The second Markets in Financial Instruments Directive (MiFID II) aims at achieving extensive transparency over investment firms’ order execution modalities. Moreover, investment firms are soon required to install thorough reporting and monitoring mechanisms in order to evaluate whether the execution quality achieved corresponds to the quality promised in their best execution policies.

Global investment in regulatory technology (RegTech) companies that address MiFID II totalled $378.5m between 2013 and 2017 according to research from FinTech Global.  Capital invested in RegTech companies addressing MiFID II globally increased at a CAGR of 18.2% between 2013 and 2017, reaching a total of $378.5m . This equates to 9.5% of the total investment in RegTech companies during the same period.

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