MiFID II’s SI Regime: Analyzing Non-Bank Liquidity in EU’s Equities Markets

The systematic internaliser (SI) regime has exploded in popularity since MiFID II go-live, allowing firms to deploy both risk capital and market making-type liquidity to the buyside in a compliant manner. The adoption of the SI regime by several of the world’s largest proprietary trading firms, commonly referred as electronic liquidity providers (ELPs), represents a significant shift for European market structure. The buyside are understandably taking a cautious view towards this liquidity, until more data is available. However, early evidence suggests that while interactions with ELP SIs have been limited to date – estimated at just over €1bn of daily notional – those firms that have opted-in have experienced limited market impact with some larger-than-anticipated fills.

This TABB Group report, MiFID II’s SI Regime: Analysing Non-Bank Liquidity in EU’s Equities Market, reviews the adoption of ELPs SIs, how they are being accessed, as well as some execution statistics and volumes.