MiFID II SOLUTIONS & SERVICES. Do you have access to the data and solutions you need to comply with MiFID II? INTRODUCTION

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1 HOW Do you have access to the data and solutions you need to comply with MiFID II? MiFID II CAPABILITIES & MiFID II & SERVICES : THE 1 MiFID II COMPLIANCE

2 TO MiFID II MiFID II represents one of the most fundamental and far reaching regulations that the industry is addressing. Its effect is not just in the European Union, its ripples will reach far out into the global financial industry, impacting all financial organisations that deal with the European markets. John Mason, Head of Regulatory Content Propositions, Thomson Reuters The Markets in Financial Instruments Directive, MiFID II, will take effect on 3 January Speed and quality of data will determine the winners and losers. MiFID II will command significant changes in business and operating models, systems, the data you use and retain, your people, and your processes. Your partners and the solutions you choose can give you an advantage. Since the adoption of MiFID I in 2007 (and long before) Thomson Reuters has been a market leader in providing expertise, guidance and solutions to financial firms so they not only comply, but do so in a way that is streamlined, efficient and integrated. Thomson Reuters and our partners have the content, technology and expertise to help you cross the line into the new world of MiFID II compliance and beyond. Visit mifidii.com for the latest news and information. HOW MiFID II CAPABILITIES & : THE 2 MiFID II COMPLIANCE PAGE 1 OF 2

3 CONTENTS HOW 4 HOW MiFID II CAPABILITIES & : THE 39 MiFID II CAPABILITIES & : THE 3 MiFID II COMPLIANCE MiFID II COMPLIANCE 3 PAGE 2 OF 2

4 HOW SUPPORTS YOUR MiFID II HOW Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Regulatory Change Management - Thomson Reuters Regulatory Intelligence Thomson Reuters solutions: - Thomson Reuters Eikon - Thomson Reuters Intelligent Tagging - Thomson Reuters Research Management Console - Thomson Reuters StarMine Monitor Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson Reuters DataScope - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics We provide best in class regulatory change and mapping workflow solutions to power risk radars. We and our partners enable buy-side firms to track, control access, and aggregate all research and associated services from the sell-side to help manage budgets and meet research unbundling requirements. We enable sell-side firms to measure and control the dissemination of their research so they can effectively monetize their offering. We help you meet HFT specific transaction reporting requirements with access to modular tools and industryleading reference data. We provide state-of-the-art best execution analytics, data and applications to help you prove best execution. HFT & STRUCTURAL CHANGE To learn more see page BEST EXECUTION To learn more see page RESEARCH PERMISSIONING & UNBUNDLING To learn more see page REGULATORY AUTOMATION & WORKFLOW MAPPING To learn more see page MiFID II CAPABILITIES & Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson One (Wealth US) - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters Lipper Fund Rankings - Thomson Reuters Regulatory Change Management - Thomson Reuters Regulatory Intelligence - Thomson Reuters Starmine Analyst Rankings - Thomson Reuters Velocity Analytics We provide solutions and expertise to support your MiFID II requirements. INVESTOR PROTECTION To learn more see page TRANSACTION REPORTING & RECORD KEEPING To learn more see page : THE Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters FXall - Thomson Reuters FX Trading - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics We provide access to financial reference data, applications and solutions to identify and report. HOW 4 MiFID II COMPLIANCE PAGE 1 OF 2

5 IS UNIQUELY POSITIONED TO ENABLE OUR CUSTOMERS TO FULFILL THEIR AND BE COMPETITIVE UNDER MiFID II HOW We are committed to bringing transparency to the market through pre- and post-trade data sourced from SIs, Approved Publication Arrangements and trading venues. Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) PRE- & POST-TRADE TRANSPARENCY To learn more see page 6-7 TRADING VENUES To learn more see page 8-9 We provide the ability to trade on FX compliant platforms with suitable volume and liquidity levels to meet your FX trading requirements. Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson Reuters FX Trading - Thomson One (Wealth US) - Thomson Reuters DataScope - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters FXall - Thomson Reuters Matching - Thomson Reuters Regulatory Intelligence (TRRI) - Thomson Reuters Trade Notification (TRTN) - Tradeweb APA REFERENCE DATA To learn more see page SYSTEMATIC INTERNALISER (SI) DETERMINATION To learn more see page To learn more see page APPROVED PUBLICATION ARRANGEMENTS (APAS) & PUBLICATION SERVICES We provide solutions to enable organisations to determine if they have breached Systematic Internaliser (SI) thresholds. We provide the ability to publish pre- and post-trade data and reports in near real-time via an APA to support your trade reporting requirements. Thomson Reuters solutions: - BestX FX Analytics Platform - Thomson One (Wealth US) - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Systematic Internaliser (SI) Determination Platform - Thomson Reuters Velocity Analytics Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters Intelligent Tagging - Thomson Reuters Research Management Console MiFID II CAPABILITIES & : THE - Tradeweb APA We provide access to aggregated MiFID II risk, liquidity, volume, additional pricing, and referential content to support your analysis and reporting. Thomson Reuters solutions: - Thomson Reuters DataScope - Thomson Reuters Eikon - Thomson Reuters Elektron - Thomson Reuters Enterprise Platform (TREP) MiFID II COMPLIANCE 5 HOW PAGE 2 OF 2

6 PRE- & POST-TRADE TRANSPARENCY TRANSPARENCY ON THE LINE HOW One of the big data challenges posed by MiFID II is how do I take advantage of what transparency actually brings to us? How can I gather all the market data, which will be available in the market and bring it together in a normalized way, and data mine and really understand the market value of certain instruments? David Bull, Head of Fixed Income Content Management, Thomson Reuters MiFID II CAPABILITIES & : THE 6 PAGE 1 OF 2

7 When trading through a recognized venue in a transparency eligible product, the platform will manage the necessary publication of quotes and trades. However, when dealing directly with clients or other firms, this responsibility potentially falls to the liquidity provider to publish a quote, but to either one or other of the counterparties when it comes to publishing the details of the trade itself. Visibility of other dealers quotes and trades, whether from trading venues or OTC data provided via the Approved Publication Arrangements (APAs), will help with price discovery. Traders and sales desks will need to build strategies for using this data to price products, based on visible market activity and how the competition will react to their firms own visible quotes. Quotes can remain private in certain instances, depending on the quote size. It adds a new strategic dimension to both buy- and sell-side as you decide when to select quote sizes above and below transparency size thresholds. Managing requests for quote (RFQ) and responses, balancing size, timeliness of execution, choice of participants in the process and risk of market impact will be new competitive weapons. In order to successfully navigate this new environment, sales desks and traders will need to have access to the broadest and most up-to-date real-time market data. This needs to be available on both the desktop and within their firms pricing tools for streamed-pricing, quoting and price benchmarking tools. We will bring them together via Thomson Reuters Elektron Real Time feeds or displayed on the Thomson Reuters Eikon desktop. These provide you with the most comprehensive, aggregated views on MiFID II compliant trade activity. The complete market view in one location. Thomson Reuters DataScope Select will also provide access to key MiFID II related instrument data, allowing the sales and trading desks to make fully informed pricing decisions. This includes MiFID II liquidity status and the various threshold size limits that determine the transparency obligations of each individual quote provided. As with our MiFID I service, our instrument reference data will be mirrored on the real-time feeds and Eikon desktops, in line with client consumption needs. Thomson Reuters offers fully transparent reference data, enhanced transparency and brings a vast body of data into line to help you achieve full compliance with MiFID II market structure rules. OUR Thomson Reuters Elektron Thomson Reuters Eikon Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) For full solutions information see page HOW MiFID II CAPABILITIES & : THE We are committed to bringing complete transparency to the market through sourcing all pre-trade and posttrade data. These will be sourced from Systematic Internalisers (SIs), APAs, and trading venues. 7 MiFID II COMPLIANCE 7 PAGE 2 OF 2

8 TRADING VENUES Under MiFID II we expect the trading landscape to change significantly. We are going to see the introduction of new trading venues, including MTFs, organised trading facilities and the SI regime, and of course, there are the regulated markets we have today. Chris Leonard-Appleton, Director, Regulation, Thomson Reuters HOW MiFID II CAPABILITIES & : THE 8 MiFID II COMPLIANCE PAGE 1 OF 2

9 Under MiFID II we will expand the Thomson Reuters MTF (Multilateral Trading Facility) to include FXall QuickTrade* along with Forwards Matching which is operated as an MTF today. As an MTF, Thomson Reuters is obligated to report all trades made on the MTF publicly, we will publish to the Tradeweb APA to meet this obligation. Additionally, Thomson Reuters is building out new reporting solutions for post-trade and transaction reporting and developing new risk controls (preand post-trade) to help our clients meet their algo trading requirements. We are also upgrading graphical user interfaces (GUI) and application programming interfaces (API) to accommodate new data fields, and providing new straight through processing (STP) feeds to provide new data fields to trade parties for their own reporting and record keeping requirements. With increasing regulatory and market conduct requirements for FX professionals including banks, alternative market makers, asset managers, hedge funds and corporates access to trusted solutions is more critical than ever to achieve and maintain success. More than 5,000 buy- and sell-side professional FX market participants trust Thomson Reuters awardwinning transaction platforms to trade over $350 billion in average daily volume. and demonstrate best execution. We will offer seamless connectivity from the Thomson Reuters FXall and FX Trading desktops to the independent transaction cost analysis (TCA) service from our partner BestX. Thomson Reuters has the breadth of experience and existing infrastructure necessary to support the changing market place under MiFID II. OUR BestX FX Analytics Platform Thomson Reuters Elektron Thomson Reuters FX Trading Tradeweb APA Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) Thomson Reuters Matching Thomson Reuters FXall Thomson Reuters Trade Notification (TRTN) Thomson One (Wealth US) Thomson Reuters Regulatory Intelligence (TRRI) Thomson Reuters Eikon For full solutions information see page HOW MiFID II CAPABILITIES & : THE Thomson Reuters, in partnership with the foreign exchange analytics specialist BestX, will enable buy-side participants using Thomson Reuters FXall and FX Trading to streamline analysis of transaction costs, helping them define, achieve 9 MiFID II COMPLIANCE *FXall QuickTrade instrument coverage: forwards, swaps, NDFs, options and money markets. 9 PAGE 2 OF 2

10 SI DETERMINATION HOW The extension of the SI regime to nonequities markets and the introduction of quantitative thresholds have put this obligation at the heart of many sell-side firms MiFID II compliance programmes. MiFID II CAPABILITIES & Under the new MiFID II regulations, investment firms are required to determine whether they trade on a frequent, systematic and substantial basis in order to identify whether they are a Systematic Internaliser (SI) or not. These firms will make this decision based on whether their activity exceeds certain thresholds. Investment firms can be confident whether they will exceed these thresholds (and become an SI) by leveraging the Thomson Reuters market data network. Firstly, investment firms can estimate the total market size in near real time for both equity and non-equity markets through Thomson Reuters aggregated market data. Thomson Reuters is able to collect the total number and volume of trades in the EU from trading venues and Approved Publication Arrangements (APAs). Instrument definitions are aligned with the SI threshold criteria. Secondly, Thomson Reuters will carry official total market size information published by regulators. Thomson Reuters will distribute this data through our existing channels, for example Thomson Reuters DataScope Select, Thomson Reuters Eikon and Thomson One (Wealth US) desktops, and feeds. : THE 10 MiFID II COMPLIANCE PAGE 1 OF 2

11 HOW MiFID II CAPABILITIES & Thirdly, Thomson Reuters Systematic Internaliser Determination Platform dashboards have been designed to help investment firms determine whether they meet regulatory requirements for trading as an SI. The display takes trading data from that investment firm, cross-asset, and compares this to total market size data to conduct the frequent and systematic as well as substantial tests. The Platform dashboard provides Traders and Compliance Offers with insight into their current market participation in line with MiFID II regulations. Thomson Reuters enables investment firms not only to comply with the systematic internaliser regime, but to thrive in the new MiFID II world. OUR Thomson Reuters Systematic Internaliser (SI) Determination Platform Thomson Reuters DataScope BestX FX Analytics Platform Thomson Reuters Velocity Analytics Thomson Reuters Elektron Thomson Reuters Eikon Thomson One (Wealth US) For full solutions information see page MiFID II COMPLIANCE 11 : THE PAGE 2 OF 2

12 APA & PUBLICATION SERVICES DIRECT APA ACCESS TO ENSURE YOU RE IN LINE HOW Due to the light that MiFID II shines onto previously unlit markets the ability to publish pre- & post-trade data via an Approved Publication Arrangement (APA) is essential. Consequently there is a need for organizations to be able to publish that data in an efficient and timely manner. Ideally this could be done by utilizing an existing infrastructure capability rather than require something new and so Thomson Reuters has enhanced its market leading Thomson Reuters Enterprise Platform (TREP) to be able to capture the necessary quote and trade data and publish that data to the designated APA of choice. started with all European equities listed on EU regulated markets. As MiFID II transparency requirements move into the OTC space, there is a huge increase in instrument coverage, both in number and asset type. Inevitably, the challenges are around what needs to be published, when and by whom. With such a profound change to the amount of data available to the market, there are bound to be impacts. MiFID II CAPABILITIES & MiFID II mandates that market players, trading platform providers and related parties must publish pre- and post-trade data and report all applicable transactions to regulators and APAs in accordance with prescribed timelines. MiFID II brings a whole new set of market data publication requirements to both trading venues and investment firms. MiFID I pre- and post-trade publication requirements To successfully navigate this new environment, sales desks and traders will need access to both up-to-date, real-time market data and comprehensive instrument reference data. Thomson Reuters is committed to bringing together as many of the new data sources as practical, whether new systematic internaliser (SI) quotes, OTC quotes and trade reports from APAs, new trading venues or just new transparency data from existing markets. : THE 12 MiFID II COMPLIANCE PAGE 1 OF 2

13 HOW We will also provide access to a pre- and post-trade publication service for bonds, structured finance products, derivatives and emission allowances. The APA (in partnership with Tradeweb) will be designed to ease publication by incorporating deferral and waiver rules into the platform. This will ensure only appropriate quotes and trades are published at the right time. MiFID II requires SIs to demonstrate clear transparency for their own-account trading. This enables investors to know that they benefit from execution that equals or betters that available from public venues. Thomson Reuters provides the key data infrastructure and analytics to support transparency through our line of unrivalled solutions. OUR Tradeweb APA Thomson Reuters Elektron Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) Thomson Reuters Eikon Thomson Reuters Research Management Console Thomson Reuters Intelligent Tagging For full solutions information see page MiFID II CAPABILITIES & : THE 13 MiFID II COMPLIANCE MiFID II COMPLIANCE 13 PAGE 2 OF 2

14 REFERENCE DATA Reference data really forms the cornerstone of MiFID II data reporting and a number of workflows and decisions that firms will have to undertake. Accurate instrument reference data will be required by trading venues and SIs to report through to the regulators. Having inaccuracy on these financial instruments may have impacts on the prices and actually understanding what those instruments are on the trading platform. David Bull, Head of Fixed Income Content Management, Thomson Reuters HOW MiFID II mandates that non-equity instruments move onto exchange where suitable. Market participants will have a complete overview of the entire non-equity trading lifecycle and adopt suitable risk models to ensure they are mitigating their risk exposure, and obtaining the best value across the trading and investment cycle. A key ability to ensure this is possible, is the aggregation of market and reference data. In the new FICC environment under MiFID II, many of the inter-dealer and dealer-to-client platforms will have to formalize their status, either as a Multilateral Trading Facility (MTF) or an Organized Trading Facility (OTF) and as such, will have to publish trade data in a consistent manner. Whilst these platforms are not essentially new, the availability, type and volume of data will change and increase. A good example of this will be the granularity of time-stamp data against order and execution data. Trading venues can include regulated markets, Multilateral Trading Facilities, and Organized Trading Facilities. Thomson Reuters is the largest aggregator of financial data drawn from these venues. MiFID II CAPABILITIES & : THE 14 MiFID II COMPLIANCE PAGE 1 OF 2

15 HOW Thomson Reuters has unrivalled expertise in normalizing data. We use unique identifiers and apply an open message model to manage and integrate multiple data sources. We then distribute data via Thomson Reuters Elektron in real time, Thomson Reuters DataScope for intraday and tick data and Thomson Reuters Eikon for desktops and apps. MiFID II increases the need for accurate and comprehensive reference data. Firms need to know more about what instruments are allowed to be traded; about the specific products within those instruments; about the rules that apply; and, finally, about the parties who may buy them. Many buy-side firms require access to extensive reference data on the instruments they trade, to determine what needs to be reported and to generate the data points. OUR Thomson Reuters Elektron Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) Thomson Reuters Eikon For full solutions information see page MiFID II CAPABILITIES & : THE Thomson Reuters is the world s largest provider of financial reference data. MiFID II COMPLIANCE 15 PAGE 2 OF 2

16 TRANSACTION REPORTING & RECORD KEEPING Demand for better oversight of the financial markets has meant that the scope of transaction reporting has increased, both in the instruments that are covered and the amount of information required in each report. The scope for reporting will now extend to any financial instrument which has traded or been admitted to trading on a trading venue (and not just the Regulated Markets as dictated by MiFID I); which has had a request for admission to trade on a trading venue; or which has an underlying instrument or basket/index of instruments traded on a trading venue. HOW MiFID II CAPABILITIES & : THE Reference data will help to drive reporting decisions and workflows that will ultimately define whether firms are successful in meeting their reporting obligations. David Bull, Head of Fixed Income Content Management, Thomson Reuters 16 MiFID II COMPLIANCE PAGE 1 OF 2

17 A pre-requisite of transaction reporting is record keeping, bringing together a record of every order, execution and transaction event. To comply with MiFiD II reporting rules, many buy-side firms will need access to extensive reference data on the instruments they trade, both to determine what needs to be reported and to generate the data points. Investment firms must report transactions in any MiFID II financial instruments to their local regulator or approved reporting mechanism (ARM) no later than the close of the following working day. Under MiFID II each individual transaction report can contain up to 65 fields, including new flags, detailing particular trade types in certain instruments; specific details of participants, including the Legal Entity Identifier (LEI code) of counterparties, funds and individual accounts; and, raising privacy concerns, significant additional personal details (National ID/ passport numbers) of the individual persons involved in both the investment and execution decision. Thomson Reuters provides indicators to identify which instruments require transaction reporting. Thomson Reuters DataScope Select continues to be the primary service for instrument reference and pricing data, much of this information will also be included within Thomson Reuters Elektron Real Time data feeds and available in Thomson Reuters Eikon. Thomson Reuters also provides a transactional store using Thomson Reuters Velocity Analytics, and, from this stage, also the data required for transaction analysis. In addition, using standard or custom analytics, combined with Thomson Reuters Elektron Real Time or Tick History data, you can provide benchmark analytics for proving other typical business analytics, such as RFQ hit rates. Thomson Reuters is the world s number one provider of financial reference data and well positioned to help you easily access and integrate these regulatory data points. OUR Thomson Reuters Elektron Thomson Reuters Eikon Thomson Reuters Velocity Analytics Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) Thomson Reuters FX Trading Thomson Reuters FXall Thomson Reuters Systematic Internaliser (SI) Determination Platform For full solutions information see page HOW MiFID II CAPABILITIES & : THE MiFID II COMPLIANCE 17 PAGE 2 OF 2

18 INVESTOR PROTECTION COMMITTED TO INVESTOR PROTECTION HOW Under MiFID II, financial institutions must act in the best interests of their clients. Firms must have a deep understanding of who is distributing the financial products they manufacture. This underlines the responsibilities of buy-side and sell-side firms. Under MiFID II, financial institutions must act in the best interest of their client, and it is therefore paramount for firms to have a deep understanding of who is distributing the financial products they manufacture. MiFID II requires that firms improve attention paid to product design, provide complete and clear information about investments, suitability assessment of products recommended to clients, protect investor assets and fair and efficient treatment of investor complaints. This means that clients would require product suitability classifications to differentiate between complex and non-complex products and MiFID II asset classification data to comply with product design and suitability assessment. Thomson Reuters DataScope Select, our pricing and reference data service, will be updated with new fields. These will identify which new instruments and products fall under the scope of MiFID II, their classification using industry standards such as Classification of Financial Instrument (CFI) Codes, as well as indicators that provide information about product complexity and any MiFIR venue trading mandates and EMIR clearing mandates as they come into force. Where bundled investment products are sold to investors, there needs to be clear transparency as to how products are made up. Firms need to ensure that bundled products are appropriate and must also disclose whether investors could obtain better prices for individual products if they were sold separately. Costs, fees and commissions and any non-monetary benefits paid to intermediaries must also be itemized and declared. MiFID II CAPABILITIES & : THE 18 MiFID II COMPLIANCE PAGE 1 OF 2

19 HOW Firms must declare if the investment advice that they give is independent. And whether it is based on a sufficiently wide view of the market as a whole or a restricted one. Furthermore, firms must acknowledge if the products they advise on are developed by entities that are related to them. In addition to this, Thomson Reuters Regulatory Change Management workflow solutions enable firms to stay abreast of new regulatory moves. We enable you to adopt a robust regulatory change framework because MiFID II is likely to herald further investor protection initiatives. Thomson Reuters has the solutions and expertise to help you be in line with MiFID II investor protection requirements. OUR Thomson Reuters Elektron Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) BestX FX Analytics Platform Thomson Reuters Velocity Analytics Thomson Reuters Regulatory Change Management Thomson Reuters Regulatory Intelligence Thomson Reuters Eikon Thomson One (Wealth US) Thomson Reuters Lipper Fund Rankings Thomson Reuters StarMine Analyst Rankings For full solutions information see page MiFID II CAPABILITIES & : THE 19 MiFID II COMPLIANCE MiFID II COMPLIANCE 19 PAGE 2 OF 2

20 BEST EXECUTION ALIGNING YOUR ORGANIZATION TO BEST EXECUTION HOW The ability to prove best execution quality will draw a line between those providers who can deliver competitive service and those who cannot... Data, analytics and technology are the keys... Thomson Reuters can show you the way. MiFID II CAPABILITIES & : THE 20 MiFID II COMPLIANCE PAGE 1 OF 2

21 MiFID II extends the requirements of best execution across all asset classes whilst at the same time establishing a greater number of venues to aggregate. Thomson Reuters is uniquely positioned to address both elements of this equation by being the market leader in aggregated data as well as providing a best execution solution, Thomson Reuters Velocity Analytics. With its ability to absorb both real-time, reference, tick-history and client data, Velocity Analytics enables organisations to address the three fundamentals of best execution, reporting, monitoring and controlling. MiFID II requires execution venues as well as market makers and SIs to publish execution reports as stipulated by the Regulatory Technical Standard (RTS) 27. In addition, buy-side Investment Firms must also publish execution reports under the RTS 28 standard. Thomson Reuters Velocity Analytics supports the production of both of these reports. Additional monitoring capability across the extended asset classes is also supported, bringing traditional equities Transaction Cost Analysis (TCA) to a new set of instruments. Thomson Reuters Velocity Analytics also allows companies to apply the necessary controls such as policy effectiveness, calibration and case management ensuring their best execution policies are adhered to and remain effective. Are you ready to be a leader in offering compliant, best execution products and services in this new world? Thomson Reuters can show you the way. OUR Thomson Reuters Velocity Analytics Thomson Reuters Systematic Internaliser (SI) Determination Platform Thomson Reuters DataScope BestX FX Analytics Platform For full solutions information see page HOW MiFID II CAPABILITIES & : THE 21 PAGE 2 OF 2

22 HFT & STRUCTURAL CHANGE HOW MEETING MiFID II S TOUGH DEMANDS ON HFT MiFID II CAPABILITIES & For high frequency traders, meeting MiFID II s tough demands on transaction reporting will be a necessity from January Uniquely, our modular tools mean that HFT trading organizations can shape their trading platforms to meet their specific requirements. : THE 22 MiFID II COMPLIANCE PAGE 1 OF 2

23 MiFID II introduces a new regulatory regime for firms that engage in algorithmic and/or high frequency trading (HFT). In general, under MiFID II, firms carrying out algorithmic trading (including HFT) and trading venues allowing or enabling algorithmic trading will have to have in place specific effective systems, procedures and arrangements to ensure resilience and capacity. This includes testing and monitoring, as well as business continuity plans and mechanisms to control trading. Tick History delivers unmanipulated global trade and order book quote messages, microsecond time-stamped data back to These cover more than 45 million global, cross-asset OTC and exchange-traded instruments worldwide. Tick History enables market makers and prop trading firms who algorithmically quote and trade, to accurately reconstruct the order book and replay the market. These can be applied for the purposes of back-testing algos and stress testing against volatile or fast market conditions, both pre-deployment (conformance testing) and post-deployment, as part of required annual validation requirements. MiFID II defines a high-frequency trader as one sending at least two messages per second, for a single instrument on any trading venue, or at least four messages per second in respect to all instruments being traded on a venue. This goes further than any previous regulation and more firms will need to register their HFT activities. Compliance will mean storing detailed time series records of algorithmic trade history for at least five years. These records must include all fields outlined in Annex III of regulatory technical standard (RTS) 6. That is, 28 fields for each decision to buy or sell and 35 fields for each outgoing and executed order. That s a lot of information and high quality data access, storage and retrieval are vital to achieving the required level of MiFID II compliance. Thomson Reuters offers the ability to back-test trading algorithms in a pre- and post-trade testing environment. We provide unparalleled access to global historical tick data. This is recorded from Thomson Reuters real-time feeds covering both OTC and exchange traded instruments, across more than 500 trading venues as well as third party contributed data. Thomson Reuters DataScope Select will carry all relevant flags and reference data for meeting the requirements of RTS 6. For HFT traders, meeting MiFID II s tough requirements on transaction reporting will be a necessity from January Uniquely, our modular tools and industry-leading reference data mean that HFT trading organizations can shape their trading platforms to meet their specific requirements. Partnering with Thomson Reuters opens the way to meeting these requirements and continuing to stay competitive in the MiFID II environment. OUR Thomson Reuters Elektron Thomson Reuters DataScope Thomson Reuters Enterprise Platform (TREP) For full solutions information see page HOW MiFID II CAPABILITIES & : THE 23 MiFID II COMPLIANCE MiFID II COMPLIANCE 23 PAGE 2 OF 2

24 RESEARCH, PERMISSIONING & UNBUNDLING BUY-SIDE HOW OBTAIN THE BEST QUALITY RESEARCH EFFICIENTLY Choice in research is almost unlimited, but quality and price vary greatly. As the largest aggregator of real-time research in the world, we serve up a comprehensive listing of research and enable you to easily request the entitlements required to view the best research to meet your needs. With our partners, Thomson Reuters can provide you with an aggregated view of all sell-side touchpoints (research, analyst calls, corporate access events, etc.), and a MiFID II compliant resource tracking and broker vote solution. Thomson Reuters Eikon provides an unbiased sellside analyst performance evaluation focusing on analyst accuracy as well as relative analyst ranking by security and sector. Part of our proprietary Thomson Reuters StarMine investment analytics, our analyst score card and rankings help you make or justify broker selection decisions. MAXIMIZE THE USE AND EFFECTIVENESS OF IN-HOUSE RESEARCH Knowing how research is used within your organization can help you measure its value and relevance, and aid in discussions with sell-side firms. Thomson Reuters enables you to track usage by enterprise, departments or individual buy-side analyst. You can also use the Thomson Reuters Eikon platform to host your own proprietary research. This can help you gain an understanding of the strengths of your internal research and know where your firm relies on outside perspective. You can also learn how each professional or team uses information, where it comes from and what the cost is. OUR Thomson Reuters Eikon Thomson Reuters StarMine For full solutions information see page MiFID II CAPABILITIES & : THE 24 MiFID II COMPLIANCE PAGE 1 OF 2

25 Our solutions help control access and permissions, and offer research readership reporting providing transparency into what is actually being viewed and what customers find most valuable. All of which can help build more accurate research pricing models and billing schemes. HOW SELL-SIDE Value, Measure and Monetize Research The first step in monetizing your research is ensuring that buy-side consumers are able to find it. To help you assess the usability, competitive quality and improve the monetization of your research, we offer StarMine Monitor. This application enables you to assess the relative, unbiased performance of your analysts across industries, sectors and overall coverage universes. It evaluates the profitability of buy/sell/hold recommendations and the accuracy of earnings estimates so Directors of Research can review overall strengths and weaknesses of their analysts. We also provide full usage reporting including details of all research consumed by your buy-side customers. We also help sell-side firms to control and manage administration and distribution of research. The Thomson Reuters Research Management Console is an easy-to-use platform that enables you to control and track requests for access and entitlements in a customizable and granular fashion. Link back capabilities to your research portal are available through Thomson Reuters Eikon and APIs, to add an additional level of authentication and allow for a more dynamic presentation of your research. We can help you make your research more discoverable using Thomson Reuters Intelligent Tagging software that adds a unique identifier, enabling enhanced search and discoverability via a research portal. In addition, for those wanting to enrich the customer experience, we can host your own research portal, and also provide custom design via our partners. Thomson Reuters has the solutions and expertise to help you be in line with MiFID II requirements. OUR Thomson Reuters Eikon Thomson Reuters StarMine Monitor Thomson Reuters Intelligent Tagging Thomson Reuters Research Management Console For full solutions information see page MiFID II CAPABILITIES & : THE MiFID II COMPLIANCE 25 PAGE 2 OF 2

26 REGULATORY AUTOMATION & WORKFLOW MAPPING HOW LEVERAGING OUR REGULATORY CONTENT INTO MiFID II COMPLIANCE WORKFLOWS MiFID II CAPABILITIES & Under MiFID II, financial institutions must act in the best interests of their clients. Firms must have a deep understanding of who is distributing the financial products they manufacture. This underlines the responsibilities of buy-side and sell-side firms. MiFID II aims to provide a more efficient, resilient and transparent way for financial markets to operate. Understanding the impact of MiFID II on your organization and how to prepare to meet your regulatory requirements is essential. Thomson Reuters Regulatory Change Management is a powerful workflow solution that enables your organization to manage a high volume of regulatory developments with a streamlined and automated process. We support you in taking the appropriate steps for your business to ensure that you change the required processes and procedures in light of the regulatory changes brought by MiFID II. Enhanced content integration and mapping capabilities connect the regulatory change : THE 26 MiFID II COMPLIANCE PAGE 1 OF 2

27 HOW management process to your organizational structure. Your compliance teams can incorporate insight and content from Thomson Reuters Regulatory Intelligence, which offers comprehensive coverage from over 750 regulators globally. This can be used to map relevant policies to rule changes around MiFID II and evaluate their effect on your business. The solution can also integrate regulatory content into your compliance workflow processes from third parties. As authorities outline the regulations they will require, Thomson Reuters can alert you to the changes you need to make. Our fully equipped compliance dashboard can provide industry insight on MiFID II from subject matter experts, track new and updated regulatory changes around MiFID II, and map relevant rules and regulatory requirements across your entire enterprise. Our flexible rating system lets you plot regulatory change by risk level, keep oversight of key due dates, identify controls relevant to the regulation and issue action plans and allocate ownership to proactively notify business owners of any regulatory change updates. Let Thomson Reuters guide you to MiFID II regulatory compliance. OUR Thomson Reuters Regulatory Change Management Thomson Reuters Regulatory Intelligence Thomson Reuters DataScope For full solutions information see page MiFID II CAPABILITIES & : THE MiFID II COMPLIANCE 27 PAGE 2 OF 2

28 The timeline for MiFID II compliance is now clear but time is passing. There is so much work to do before January 2018 that it is important to act now to ensure your business and operations will be MiFID II ready in time. Once you have the right solutions and services in place, the challenging workload that MiFID II requires will be easier to get to grips with. HOW MAY 2014 MAY 2014 DEC 2014 JUN 2015 DEC 2015 Council approves MiFID II / MiFIR ESMA published a Discussion Paper and a Consultation Paper to gather industry s initial views ESMA published its Technical Advice to the Commission and a key Consultation Paper on draft RTS / ITS ESMA published and sent to the commission its first set of Technical Standards ESMA publishes the ITS and submits these to the Commission MiFID II CAPABILITIES & : THE MAINLINE Operationalizing TO COMPLIANCE MiFID I JUN 2014 MiFID II / MiFIR published in the Official Journal SEP 2015 ESMA publishes the RTS and submits these to the Commission 28 MiFID II COMPLIANCE PAGE 1 OF 2

29 HOW MAY 2016 JUL 2017 JAN 2018 Council and Parliament agree with the proposal from the EC to delay the application of MiFID II to 3 Jan 2018 and the deadline for implementation in national laws to 3 July 2017 MiFID II must be transposed into national law of Members States MiFID II / MiFIR comes into effect MiFID II CAPABILITIES & Operationalizing MiFID II Implementing MiFID II : THE MiFID II COMPLIANCE 29 PAGE 2 OF 2

30 MiFID II CAPABILITIES & HOW KEY MiFID II CAPABILITIES: Real & Non Real Time Market Liquidity, Volume & Pricing Data: MiFID II Identifiers & Referential Content: Approved Publication Arrangements (APAs): Foreign Exchange Trading Solutions: Analytics & Suitability Services: Systematic Internaliser (SI) Determination: MiFID II COMPLIANT PROPOSITIONS: - Thomson Reuters Elektron - Thomson Reuters DataScope - Thomson Reuters Enterprise Platform (TREP) - Thomson Reuters DataScope - Thomson Reuters Enterprise Platform (TREP) - Tradeweb APA - Thomson Reuters MTF - Thomson Reuters FXall - Thomson Reuters Matching - Thomson Reuters Trade Notification (TRTN) - BestX FX Analytics Platform - Thomson Reuters Velocity Analytics - BestX FX Analytics Platform - Thomson Reuters Systematic Internaliser (SI) Determination Platform Systematic Internaliser (SI) Determination MiFID II SERVICE REQUIREMENTS: Approved Publication Arrangements (APAs) & Publication Services Transaction Reporting & Record Keeping Investor Protection MiFID II CAPABILITIES & : THE HFT & Structural Change Research Permissioning and Unbundling Regulatory Automation & Workflow Mapping 30 MiFID II COMPLIANCE MiFID II CAPABILITIES & PAGE 1 OF 2

31 PROPOSITIONS vs CHALLENGES Thomson Reuters customers are uniquely positioned to benefit from our MiFID II solutions enabling them to meet their MiFID II objectives. HOW Research Permissioning : Tick History (Date & Time Stamp): Regulatory Change Workflow & Mapping Services: Market & Analysis Desktop Services: Ratings & Ranking Data and Benchmarks: Partner Workflow & Connectivity Services: - Thomson Reuters Eikon - Thomson Reuters Research Management Console - Thomson Reuters Intelligent Tagging - Thomson Reuters Elektron - Thomson Reuters DataScope - Thomson Reuters Regulatory Change Management (TRRCM) - Thomson Reuters Regulatory Intelligence (TRRI) - Thomson Reuters Eikon - Thomson One (Wealth US) - Thomson Reuters Regulatory Intelligence (TRRI) - Thomson Reuters Lipper Fund Rankings - Thomson Reuters StarMine Analyst Rankings - Thomson Reuters StarMine Monitor - Thomson Reuters Partner Marketplace MiFID II CAPABILITIES & : THE MiFID II CAPABILITIES & MiFID II COMPLIANCE 31 PAGE 2 OF 2

32 HOW BestX FX Analytics Platform Our partnership with FX analytics specialists BestX offering seamless connectivity to the independent total cost analysis (TCA) service from BestX from the Thomson Reuters FXall and FX Trading desktops. Thomson One (Wealth US) Integrated access to information, analytics and tools delivered within workspaces designed specifically for each target customer s workflow. Tradeweb APA Global electronic multi-dealer-to-customer marketplace for trading fixed income, derivatives and money market products which connects major investment banks with institutional customers. Thomson Reuters partnership with Tradeweb allows market participants to access a fully compliant APA service. Thomson Reuters DataScope Data delivery platform for non-streaming cross-asset class content globally; supports the management of financial risk, including such instruments as peer-topeer or marketplace loans. Thomson Reuters Eikon Our flagship desktop platform providing pre-trade decision-making tools, news, real-time pricing, charting, analytics, portfolio tools, trading connectivity and collaboration tools. Thomson Reuters Elektron Flexible, high performance, cross asset data and trading infrastructure that includes low latency real-time data feeds, non real-time data, analytics and transactional connectivity. Services can be offered in a range of deployment models. Thomson Reuters Enterprise Platform (TREP) Scalable and robust technology platform that enable financial institutions to control real-time information flows. Thomson Reuters FXall Bank-to-client trading and workflow solutions to over 1,700 institutions worldwide including asset managers, banks, broker-dealers, corporates and hedge funds with liquidity from over 160 leading market makers. Thomson Reuters FX Trading FX Trading is our next generation desktop platform that delivers our entire foreign exchange offering and provides a single point of access to liquidity in hundreds of currency pairs from the Thomson Reuters Matching, Dealing and FXall platforms. MiFID II CAPABILITIES & : THE 32 MiFID II COMPLIANCE PAGE 1 OF 2

33 HOW Thomson Reuters Intelligent Tagging Thomson Reuters Intelligent Tagging, processes internal research and co-mingles valuable in-house insights with external research and multiple additional sources of unstructured data. Thomson Reuters Lipper Fund Rankings Thomson Reuters Lipper Rankings are award winning fund ratings that are available to the market. Thomson Reuters Matching Thomson Reuters Matching is an anonymous central limit order book spot, forward and NDF trading for the interbank FX community in over 80 currency pairs and with over 1,100 subscribers. Thomson Reuters Regulatory Intelligence (TRRI) & Compliance Management A suite of information and software products with global coverage of over 500 regulatory bodies, over 950 rulebooks, and exclusive news and analysis from global regulatory compliance experts and journalists. Thomson Reuters Regulatory Intelligence is a single solution providing content and technology to help navigate global regulatory compliance. Thomson Reuters Regulatory Change Management provides coverage of legislative and regulatory content from over 750 global regulators and mapping capabilities. Thomson Reuters Research Management Console application or API enables you to value, measure and monetize research within your organization. Thomson Reuters StarMine Analyst Rankings Thomson Reuters StarMine Analyst Rankings are essential when benchmarking which analysts are performing best. Thomson Reuters StarMine Monitor Thomson Reuters StarMine Monitor offers the most proven, fair, and rigorous tools to objectively measure the performance of your research team. StarMine evaluates the profitability of buy/sell/hold recommendations and the accuracy of earnings estimates. Thomson Reuters Systematic Internaliser Determination Platform A best of breed systematic internaliser (SI) determination platform that allows our customer to be MiFID II compliant. Thomson Reuters Trade Notification (TRTN) The premier global messaging hub where banks, brokers and their clients come together to exchange trade notifications on a neutral and independent platform with more than 2,500 publishers and receivers, sharing millions of messages every month. Thomson Reuters Velocity Analytics Our cross asset best execution reporting and monitoring solution which consumes Tick History data and is powered by Kx analytical software. MiFID II CAPABILITIES & : THE MiFID II COMPLIANCE 33 PAGE 2 OF 2

34 Our valuable Partner ecosystem enables you to get more from working with Thomson Reuters to solve your MiFID II challenges, further streamlining your operations. Our partners provide a wealth of platforms, data, consulting and other services that augment our content and technology and extend its capabilities. We are closely collaborating with our partners to develop MiFID II specific content and capabilities. Whether working with the more than 500 venues in our network or developing greater connectivity with a wide range of front-, middle-, and back-office providers, we will ensure you seamlessly have access to integrated solutions tailored to your needs. HOW MiFID II CAPABILITIES & : THE 34 PAGE 1 OF 2

35 HOW MiFID II CAPABILITIES & : THE 35 MiFID II COMPLIANCE MiFID II COMPLIANCE 35 PAGE 2 OF 2

36 AWARD-WINNING CONTENT HOW MiFID II CAPABILITIES & : THE 36 MiFID II COMPLIANCE PAGE 1 OF 2

37 Global Finance World s Best FX Providers Best Independent Online FX Trading System Best Liquidity Provider Innovator in FX January 2016 Wall Street Letter Institutional Trading Awards Best Trading Technology February 2016 CTA Intelligence US Services Awards Best Data and Information Provider February 2016 Corporate Treasurer Awards 2015 Best Technology Platform Best Trading Platform Best Treasury & Finance Strategies March 2016 Technical Analyst Awards Best Technical Analysis Platform April 2016 Sell-Side Technology Awards Best Data Provider to the Sell Side April 2016 HFM European Hedge Fund Services Awards Best Data and Information Provider April 2016 Structured Products Technology Best Credit Valuation Adjustment Calculation Best Debit Valuation Adjustment Calculation Best Funding Valuation Adjustment Calculation May 2016 Euromoney FX Survey Best Multibank and Independent Platform May 2016 Wealth Briefing Asia - Hong Kong Best FX Solutions Provider May 2016 Profit & Loss Readers Choice Awards Best FX Market Data Platform Best Trading Platform for Corporations May 2016 Inside Market & Inside Awards Best Provider Best News Provider Best Mobile Initiative June 2016 Waters Technology Best Provider Best Corporate Actions Solution Provider Best Cloud Based Services Provider July 2016 Structured Products Asia Awards Technology Provider of the Year September 2016 Investment Week Awards Best Investment Research Blog October 2016 TMT News 2016 Technology Awards Best Global Financial Technology October 2016 Buy-Siders Choice Awards FX Trading System November 2016 Wealth and Finance 2016 Awards Best Financial Market Intelligence Provider Risk and Compliance Specialist of the Year South Africa November 2016 Buy-Side Tech Awards Awards Best Buy-Side EMS Provider (REDI) Best Buy-Side Pricing / Valuation Service (TRPS) November 2016 FX Week Awards Best Broker for Forward FX Best Broker for Emerging Markets Best Vendor for Dealing Technology November 2016 CTA Intelligence European Services Awards Best Data and Information Provider November 2016 HOW MiFID II CAPABILITIES & : THE 37 MiFID II COMPLIANCE MiFID II COMPLIANCE 37 PAGE 2 OF 2

38 : THE MAINLINE TO COMPLIANCE WHY CHOOSE US? HOW TRUSTED AND RELIABLE BRAND Thomson Reuters is the world s leading source of intelligent information. Thousands of organizations trust us to help them make risk-aware choices. Thomson Reuters is recognized as a leading source of trusted answers, winning analyst recognitions and awards around the globe for our technology and platform capabilities. DEEP AND RICH COVERAGE Thomson Reuters employs the world s top journalists, analysts, researchers, and other experts to give you the insight to help you navigate the road ahead. UNDERSTAND STAKEHOLDER IMPORTANCE We value all of our relationships, and we know you do too. Whether the focus is regulatory reporting, or a business decision, getting risk information right is essential. WELL-ROUNDED SUITE OF Only Thomson Reuters has such a wide range of capabilities across so many of today s crucial risk domains. We can work with your organization in a truly connected way. HUMAN EXPERTISE Thomson Reuters employs the world s top journalists, analysts, researchers, and other experts to give you the insight to help you navigate the road ahead. REDUCE OPERATIONAL COSTS Our solutions help you focus your valuable resources where they matter most to your business. We can also help improve your customers experience. PROVEN AS A PARTNER GLOBALLY Thomson Reuters has dozens of offices around the globe enabling us to truly partner with your organization no matter where you are located. MiFID II CAPABILITIES & : THE 38 MiFID II COMPLIANCE : THE PAGE 1 OF 1

39 Thomson Reuters is the leading provider of end-to-end MiFID II data, services, solutions and systems. Together with our partners, we can ensure that you ll be prepared to comply with MiFID II and other pressing regulations. HOW FIND OUT MORE ABOUT CROSSING THE LINE TO MiFID II COMPLIANCE. For more information contact your Thomson Reuters representative or visit us online. Visit mifidii.com MiFID II CAPABILITIES & : THE 39 MiFID II COMPLIANCE 39 PAGE 1 OF 1

40 HOW MiFID II CAPABILITIES & : THE 40 MiFID II COMPLIANCE 2017 Thomson Reuters