Investment banks are facing enhanced capital requirements as a result of the changing regulatory agenda. Increased data quantities, fragmented liquidity, and inadequate technology resources are placing more pressure on sell-side firms to fundamentally reappraise their existing technology capabilities, requiring constant reinvestment to remain competitive.

Continued regulatory pressure, specifically from MiFID II, has forced firms to determine their status as a Systematic Internalizer (SI). Under MiFID II, if firms’ activity exceeds certain thresholds, including equity and non-equity asset classes, they face additional regulatory obligations – including pre-trade transparency, quote and trade matching, best execution reporting and reference data reporting.

Swift transaction speeds, trading incentives, and lower costs have contributed to the growth of popularity in MTFs and soon OTFs throughout Europe. Under MiFID II, both MTFs and OTFs face additional regulatory obligations, including systematic execution, best execution, pre-trade transparency, post-trade transparency, and transaction reporting.

Continued proliferation of trading venues have caused increased fragmentation in liquidity, placing additional pressure on firms’ routing systems to ensure optimal trade execution. To this end, firms must ensure their existing technology capabilities are up to par, continually investing to keep an edge.