MIFID II / MIFIR - FIA | FIA

MIFID II / MIFIR

ICE IMPLEMENTATION UPDATE

JULY, 2017

DISCLAIMER

DISCLAIMER

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INTERCONTINENTAL EXCHANGE

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MIFID II / MIFIR INTRODUCTION

? Building on existing MiFID I rules, MiFID II / MiFIR's expanded rules extend to a wider range of market participants, execution venues and financial instruments

? Rules aim to improve the functioning of financial markets making them more efficient, resilient and transparent

Market Structure

? Trading obligation ? Organised Trading Facilities ? Data Reporting Service

Providers ? Non discriminatory access ? Clearing STP

Investment Firms

Market Participants 1

Credit Commodity

Institutions

Firms

3rd Country Firms

Execution Venues 2

RM MTF OTF SI

Trading Venues

Transparency

? Pre trade transparency ? Post trade transparency ? Transaction reporting ? Position reporting ? Commitment of traders reports ? Best execution data

Governance & Controls

? Admission, suspension, removal from/to trading

? Authorisation rules ? Position limits ? Maintenance of order data

? Direct Electronic Access ? Clock Synchronisation ? Algo & HFT rules ? Market Making ? Order to Trade Ratio

1. Reduced exemptions vs MiFID I brings additional participants under MiFID II with potential knock on impact of EU Capital rules

INTERCONTINENTAL EXCHANGE 2. RM = Regulated Market; MTF = Multilateral Trading Facility; OTF = Organised Trading Facility; SI = Systematic Internaliser

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MIFID II / MIFIR SCOPE FOR ICE

ICE'S EUROPEAN MARKETS AND PRODUCTS

ICE Futures Europe (IFEU)

ICE Endex (NDEX)

Financials 1 Commodities 1

? Oil (Brent, Gasoil, WTI, HO, RBOB) ? S2F (Oil, NGL/LNG, Freight) ? UK Gas & Power ? Coal ? Emissions ? Softs (Cocoa, Robusta Coffee, White Sugar, Feedwheat)

? EU Gas (Dutch, Belgian, German, Italian) ? EU Power (Dutch, Belgian, German, Italian, French,

Spanish, Nordic)

? STIRs (Euribor, Short Sterling, Euroswiss, Eurodollar, Eonia,

GCF Repo)

? MLTRs (Gilts, Swapnote, ERIS rates, EU Gov Bonds) ? Equity Indices (FTSE, MSCI) ? Single Name Equities

ICE Clear Europe (ICEU) & ICE Clear Netherlands (ICNL)

Out of Scop e

? ICE Futures US2, ICE Futures Canada and ICE Futures Singapore ? ICE Endex Spot markets (TTF, ZTP, OCM) ? UK EUA and EUAA auctions operated by IFEU on behalf of DECC ? Gold Auction operated by ICE Benchmark Administration

1. Product lists are intended to be indicative rather than definitive 2. Possible Transaction Reporting obligation for MiFID investment firms in respect of certain IFUS Index Futures where one or more of the index constituents are traded

on an EU venue

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MIFID II / MIFIR CONSIDERATIONS FOR 3RD COUNTRY FIRMS

MiFID II/MiFIR applies to EU investment firms and EU branches of third-country firms providing investment services or performing investment

activities.

Some requirements will impact all companies trading on markets in the EU, regardless of their location or legal status:

o Position Limits for commodity derivatives o Position reporting (Members of EU trading venues) o Ancillary activity tests as a pre-requisite for hedging

exemption o Additional data for transaction reporting o Greater transparency on prenegotiated trades below

block minimum o Additional controls & testing of algorithms (Members

of EU trading venues) o Unexecuted orders to trades ratio

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COMMODITY DERIVATIVES

1. POSITION REPORTING & COT 2. POSITION LIMITS 3. DELIVERABLE SUPPLY 4. ANCILLARY ACTIVITIES 5. CARVE OUTS / TRANSITIONAL ARRANGEMENTS

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