MiFIR (Markets in Financial Instruments Regulation)

SUMMARY

MiFIR (Markets in Financial Instruments Regulation) is a European Union regulation that works in conjunction with MiFID II to establish rules for improving transparency and oversight in financial markets. It focuses specifically on transaction reporting, trade data publication, and mandatory trading obligations.

Key aspects of MiFIR

Transaction reporting requirements

MiFIR mandates comprehensive transaction reporting across a wide range of financial instruments. Market participants must report detailed information about their trades, including:

Instrument identification
Trade timestamp with microsecond precision
Price and volume information
Trading capacity and venue identification
Client identification

Trade transparency regime

The regulation establishes pre-trade and post-trade transparency requirements:

Trading obligation

MiFIR introduces mandatory trading obligations for:

Shares admitted to trading on regulated markets
Certain derivatives classes deemed sufficiently liquid
Standardized OTC derivatives subject to clearing obligations

MiFIR's reporting requirements have significant implications for market data infrastructure and real-time data ingestion systems.

Next generation time-series database

QuestDB is an open-source time-series database optimized for market and heavy industry data. Built from scratch in Java and C++, it offers high-throughput ingestion and fast SQL queries with time-series extensions.

Try live demo Read documentation

Market data transparency

Best execution reporting

MiFIR requires trading venues and systematic internalizers to publish quarterly reports on execution quality, including:

Price levels
Transaction costs
Speed of execution
Likelihood of execution

Reference data reporting

The regulation mandates daily submission of reference data for:

Financial instruments admitted to trading
Instruments traded on MTFs and OTFs
Systematic internalizer quotes

Trading venue obligations

Trading controls

Venues must implement:

Circuit breakers
Pre-trade risk checks
Mechanisms to manage volatility
Post-trade controls

Market data dissemination

Trading venues must:

Provide non-discriminatory access to market data
Publish data on a reasonable commercial basis
Offer data separately by asset class

Impact on market structure

Market making obligations

MiFIR establishes formal requirements for market makers, including:

Continuous quoting obligations
Minimum presence times
Maximum spread requirements
Minimum quote sizes

Cross-market surveillance

The regulation enhances cross-market surveillance capabilities through:

Standardized reporting formats
Consolidated audit trails
Cross-venue monitoring requirements

Technology implications

Data management requirements

Organizations must maintain:

High-precision timestamps
Complete audit trails
Real-time reporting capabilities
Data quality controls

System requirements

Implementation demands:

Low-latency infrastructure
High-throughput processing
Robust data validation
Scalable storage solutions

MiFIR continues to shape market structure and operational requirements for financial firms operating in European markets, driving investments in technology infrastructure and data management capabilities.