MiFID Systematic Internaliser - AI-supported SI Compliance and Trading Optimization

A Systematic Internaliser (SI) is defined under Article 4(1)(20) MiFID II as an investment firm that executes client orders in financial instruments on a regular, organised and systematic basis by dealing on own account – outside a regulated market, multilateral trading facility (MTF) or organised trading facility (OTF). The SI represents a third trading channel alongside exchanges and MTFs. Classification is based on quantitative thresholds published quarterly by ESMA. Firms may also voluntarily register as an SI (opt-in). ADVISORI supports you in determining your SI status and meeting all associated obligations.

The SI classification thresholds are set out in Commission Delegated Regulation (EU) 2017/565 and vary by asset class. For bonds, a firm's OTC own-account trading volume must represent at least 2.5% of the total EU trading volume in the relevant instrument. Additionally, own-account trading must take place at least once per week on average. The assessment is performed quarterly on the first business day of January, April, July and October based on the preceding six months. ADVISORI guides you through the quarterly calculation and documentation of threshold values.

Systematic Internalisers must publish firm quotes for liquid non-equity instruments when prompted by a client. For equity instruments, there is a continuous quoting obligation with publication of firm bid and ask prices. Quotes must be market-aligned and may only be withdrawn under exceptional market conditions. Access to quotes must be granted on an objective, non-discriminatory basis. ADVISORI supports the design of efficient quote management processes that reliably meet these requirements.

Pre-trade transparency requires Systematic Internalisers to publish quoting information before trade execution. For liquid instruments, firm bid and ask prices must be published on a continuous basis. For illiquid instruments, lighter requirements apply – quotes need only be provided on client request. Waivers exist for large-in-scale transactions and where a reference price system is used. The MiFIR Review 2026 simplifies the waiver regime through static thresholds.

The MiFIR Review introduces significant changes for Systematic Internalisers from 2026. SIs will be replaced by Designated Publishing Entities (DPEs) as the primary party responsible for determining reporting obligations. New identifiers (TIC, Chain Identifier, INTC) are being introduced, the deferral regime for post-trade transparency is being revised, and reference data reporting is being expanded. Financial institutions must adapt their existing SI processes to the new requirements. ADVISORI guides you through timely implementation of these regulatory changes.

Systematic Internalisers must report their SI status to the relevant national competent authority. In Germany, BaFin requires notification under Section 79 WpHG through four notification types: SI-1 (voluntary opt-in), SI-2 (opt-out), SI-3 (threshold breach) and SI-4 (threshold fall-below). The notification must include affected asset classes, the Legal Entity Identifier (LEI) and Market Identifier Code (MIC). ESMA also publishes SI registers and threshold calculation data. ADVISORI handles the complete preparation and management of the notification process.

ADVISORI provides comprehensive consulting for all aspects of Systematic Internalisation: from initial SI status determination through quarterly threshold reviews to ongoing monitoring of all transparency and reporting obligations. Our consultants bring deep experience from MiFID II compliance projects at banks and investment firms. We support the implementation of efficient quote management systems, the setup of pre- and post-trade transparency processes, regulatory reporting and preparation for the MiFIR Review 2026.