1. Copyright © 2016 Axis Global Business UK Limited
MiFID II - Pre and Post Trade Transparency Overview
16th March 2016

2. Copyright © 2016 Axis Global Business UK Limited
Contents
2
1. Introduction
2. Execution venues, RFQ and disclosure via APA
3. Waiver details (Liquid/illiquid, SMS, LIS and SSTI criteria)
4. Exemptions and waivers
5. Information requirements ( via APAs) and NCAs
6. Appendix
Use Case 1

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1. Introduction
3
MiFIDII/MiFIR
The Markets in Financial Instruments Directive and Regulation is often described as the biggest overhaul of financial
markets regulation in the EU for a decade. It includes considerable changes to the pre- and post- trade transparency
(PPTT) regime for EU financial markets.
Why MiFID II?
MiFID II seeks to build up on MiFID I to make the financial markets more transparent by creating level
playing field amongst EU wide Trading Venues (TV). For example, a customer seeking to buy a financial
product will now be able to compare quotes from EU wide trading venues selling the same product.
Key impacts:
 Product scope extended from equity to cover equity-like and non-equity product traded on any TV.
 Systematic internalisers (“SIs”) and other investment firms that trade Over-the-counter (OTC) products will be subject to
PPTT obligations.
What are PPTT obligations?
 Pre-trade disclosures: Obligation to make public, on a continuous basis, current bids and offer prices, known as
Request For Quotes (RFQ).
 Post-trade disclosures: Obligation to make public the price, volume and time of transactions traded as close to real-time
as technically possible, in in respect of transactions concluded on own account or on behalf of clients. Information to be
published via an Approved Publication Arrangement (APA) to the National Competent Authority (NCA) to provide data
for PPTT calculations.

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2. Execution venues, RFQ and disclosure via APA
4
Multilateral Trading (Trading Venues – TV)
Regulated
Market
(RM)
Multilateral
Trading Facilities
(MTF)
Organised
Trading Facility
(OTF)
Non Systematic
Bilateral Trading/System
Systematic
Internaliser
(SI)
Post Trade
transparency
Pre Trade
transparency
Given below is a high level overview of the execution venues from a PPTT prospective.
MiFID II seeks to bring in all products (except the most exotic ones) within MiFID II scope*.
Post trade disclosures to be made public through Approved
Publication Arrangement (APA).
Equity and equity like instruments based on Standard
Market Size (SMS)
Non Equity instruments based on other exemptions and
waivers (SSTI, LIS and liquidity)
RFQ Disclosure via APAs
* Fx Spot is out of scope

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3. Waiver details (Liquid/illiquid, SMS, LIS and SSTI criteria)
5
• ESMA may or may not specify if a product is liquid or illiquid but instead it will
provide a set of values for banks to make the liquidity assessment.
Liquidity
assessment
• MiFIR requires SIs to comply with pre-trade transparency requirements when
dealing in sizes up to the SMS and at least 10% of the SMS for the share,
depositary receipt, ETF or certificate for which they are SIs.
Standard Market
Size (SMS)
• Is the threshold (“upper limit”) for Systematic Internalisers’ (SI) firm quotes
• Acts as waiver for liquidity providers and applies in request for quote and voice
trading systems
• Serves as a threshold for post trade deferral (no requirement on trading systems)
Size Specific To
the Instrument
(SSTI)
• Is the threshold (“upper limit”) for Trading Venues firm quotes. Orders that are
large in scale (LIS) can benefit from a waiver from pre-trade transparency.
• The waiver is designed to protect large orders from adverse market impact and
to avoid abrupt price movements that can cause market distortions.
Large In Scale
(LIS)
Overview of key waivers used to determine if PPTT obligations apply or not.

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4. Exemptions and waivers
6
Client request for a quote
Is product
admitted to
trading on a
TV?
Is product
liquid?
Is either
trading entity
EU/EEA based?
Is below
SMS/SSTI?
Is below LIS?
PPTT obligations apply
Out of Scope
Out of Scope
Out of Scope*
Out of Scope
Out of Scope
PPTT Exemptions and
Waivers
PPTT obligations will only apply
if a host of criteria is satisfied
as demonstrated in the diagram.
Please note:
1. SMS is applicable to cash
equities while SSTI is
applicable to derivatives
2. Different set of SSTI and LIS
values are applicable for
post and pre trade
3. If a product is not liquid then
a different set of criteria will
apply
4. SSTI is applicable for a SI
while LIS is applicable to
Trading Venues.
Y
Y
Y
Y
Y
Y
N
N
N
N
N
* Please refer to point 3

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5. Information requirements (via APAs) and NCAs
7
As per Article 27 of Directive 2014/65/EU(MiFIR), with regards to financial instruments admitted to trading on
various trading venues shall provide National Competent Authorities (NCA) with identifying reference data (via
APAs). Competent authorities on their part will provide necessary threshold for SI (and/or trading venues) to
enable them to perform SI and eligibility service calculations.
NCA
TVs and SIs
In case of reference data reporting, to avoid duplicity,
the responsibility for publishing transactions shall
always fall on the seller except where (for example)
only one of the investment firms party to the
transaction is an SI (and buyer) in the given
instrument. ESMA will provide SI data for
counterparty.
Buyer Seller
Post trade reporting
responsibility
SI SI Seller
Not SI SI Seller
SI Not SI Buyer
Post trade reporting obligation
by Trading Venues and SI
ESMA to aggregate
EU wide data
ESMA to receive EU
wide data
Reference data
published by
ESMA

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Appendix
8

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Use Case – Product Taxonomy
9
The Use case given below demonstrates how PPTT works using two Fixed Income (FI) products.
The key assumptions are:
a. Bond Product X and Bond Product Y are traded on a trading venue
b. Bond Product X and Bond Product Y are within MiFID II scope
c. One of the trading counterparty is based in EU/EEA.
# Bond Product X Bond Product Y Calculated fields
Trading Venue
product taxonomy
and trade
aggregation data
1 a Asset Class
Interest Rate
Derivatives
Interest Rate
Derivatives
1 b Sub-Asset Class
Bond
futures/forwards
Bond
futures/forwards
1 c
Segmentation
Criterion 1 - Issuer
of the underlying
Government X Corporate Y
1 d
Segmentation
Criterion 2 - Term
Medium Term (4,8) Medium Term (4,8)
1 e
Segmentation
Criterion 3 – Maturity
bucket
Maturity bucket 2
(3,6)
Maturity bucket 2
(3,6)
1 f Daily transactions 200 5
1 g Nominal €6,500,000 €6,500,000
1 h Venue GBLO US NY GBLO US NY
1 i ISIN NA NA
Please note that this Use Case is based on the ESMA final RTS. There are still outstanding
questions which are expected to be clarified when the L3 text is published.

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Use case – Reference data
10
# Bond Product X Bond Product Y Calculated fields
Reference
threshold
data provided
by regulators
2 a Asset Class
Interest Rate
Derivatives
Interest Rate
Derivatives
2 b Sub-Asset Class Bond futures/forwards Bond futures/forwards
2 c
Segmentation Criterion 1 - Issuer of the
underlying
Government X Corporate Y
2 d Segmentation Criterion 2 - Term Medium Term (4,8) Medium Term (4,8)
2 e Segmentation Criterion 3 – Maturity bucket Maturity bucket 2 (3,6) Maturity bucket 2 (3,6)
2 f Average daily notional amount (ADNA) €5,000,000 €5,000,000
2 g Average daily turnover (ADT) 10 10
2 h Liquid SSTI pre trade - Trade percentile 60 60
2 i Liquid SSTI pre trade – Thresh hold floor €4,000,000 €4,000,000 €7,000,000
2 j Liquid LIS pre-trade - Trade percentile 70 70
2 k Liquid LIS pre-trade - Threshhold floor €5,000,000 €5,000,000 €8,000,000
2 l Liquid SSTI post-trade - Trade percentile 80 80
2 m Liquid SSTI post-trade - Volume percentile 60 60
2 n Liquid SSTI post-trade - Threshhold floor €20,000,000 €20,000,000 €21,000,000
2 o Liquid LIS post-trade - Trade percentile 90 90
2 p Liquid LIS post-trade - Volume percentile 70 70
2 q Liquid LIS post-trade - Threshhold floor € 25,000,000 € 25,000,000 €26,000,000
2 r Illiquid SSTI pre trade €4,000,000 €4,000,000
2 s Illiquid LIS pre trade €5,000,000 €5,000,000
2 t Illiquid SSTI post trade €20,000,000 €20,000,000
2 u Illiquid LIS post trade €25,000,000 €25,000,000

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Use Case – Liquidity assessment
11
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS ADT (2g- 10) >
Daily tran (1f-200)?
IS ADNA (2f-
€5,000,000) >
Nominal (1g-
€6,500,000)?
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS ADT (2g- 10) >
Daily tran (1f- 5)?
IS ADNA (2f-
€5,000,000) >
Nominal (1g-
€6,500,000)?
Product is illiquidProduct is liquid
Bond product X Bond product Y
Y
Y
N

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Use Case – Pre trade transparency requirement
12
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS calc SSTI(2i-
€7,000,000) >
Nominal (1g-
€6,500,000)?
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS calc SSTI (2r-
€4,000,000) >
Nominal (1g-
€6,500,000)?
Pre trade obligations
do not apply
Pre trade obligations
apply
Bond product X* Bond product Y*
Y
N
Please note that Pre trade obligations apply for liquid Bond product X but not to illiquid Bond
product Y
*Use case uses SSTI assuming the products are sold by a SI

13. Copyright © 2016 Axis Global Business UK Limited
Use Case – Post trade transparency requirement
13
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS Calc SSTI (2n-
€21,000,000) >
Nominal (1g-
€6,500,000)?
Match product taxonomy (1a- 1e) with
(2a – 2e)
IS Calc SSTI (2t-
€20,000,000) >
Nominal (1g-
€6,500,000)?
Post trade obligations
apply
Post trade obligations
apply
Bond product X* Bond product Y*
Y
Please note that Post trade obligations apply for both liquid Bond product X and illiquid Bond
product Y
*Use case uses SSTI assuming the products are sold by a SI
Y

14. Copyright © 2016 Axis Global Business UK Limited 14
Shashank Kumar
Senior Manager – Axis Corporate
skumar@axiscorporate.com
David Traveria
Manager – Axis Corporate
dtraveria@axiscorporate.com
Thank you