NORD/LB as systematic internaliser
From January 3rd on, current MiFID I rules will be complemented and enhanced. These extensions are included in the directive (MiFID I) and the regulation (MiFIR). Main focus is on strengthening investor protection, reduc-ing systemic risks in market structures and increasing transparency as well as efficiency of financial markets.
A “systematic internaliser” or “SI” describes – as defined in article 4(1) Nr. 20 of EU Directive 2014/65/EU – an investment firm which, on an organised, frequent, systematic and substantial basis, deals on own account when executing client orders outside a regulated market, an MTF or an OTF.
The obligation of a systematic internaliser to publish firm quotes prior to completion of a financial transaction (pre-trade transparency requirements) is being extended to further financial instruments under MifID II.
This contains equity financial products (e.g. depository receipts, exchange-traded funds, certificates and similar financial products traded on an EEA trading venue for which there is a liquid market) as well as non-equity financial instruments (e.g. Bonds, structured finance instruments, emission allowances and derivatives).
Along with MiFID II objective criteria to define a systematic internaliser are introduced:
- “frequent and systematic basis”: is measured by the number of OTC trades in the financial instrument carried out by the investment firm on own account when executing client orders; and
- “substantial basis”: is measured either by the size of the OTC trading carried out by the investment firm in relation to the total trading of the investment firm in a specific financial instrument or by the size of the OTC trading carried out by the investment firm in relation to the total trading in the Union in a specific financial instrument.
As of January 3rd 2018 NORD/LB will become voluntary systematic internaliser for MiFID II-relevant financial products that are traded or admitted to trading on trading venues (TOTV). This includes Bonds, OTC-EUR-Interest-Rate-Swaps and OTC-FX-Derivatives.
Because of its status NORD/LB will always have the obligation for real-time post-trading transparency reporting in transactions on above-mentioned bonds and OTC derivatives. An exception to this is the case when the client is also systematic internaliser as well as vendor.
This implies that there is no need for a contractual arrangement for post-trading transparency reporting between NORD/LB and its clients.
Hence, clients of NORD/LB do not have any reporting obligation in mentioned transactions.
NORD/LB will use following APAs for its transparency reporting:
- Pre-trading transparency reporting: Bloomberg
- Post-trading transparency reporting: Regulatory Reporting Hub (RRH) of Deutsche Börse
Under MiFID II the current reporting obligation as defined in §9 WpHG is replaced by transaction reporting as defined in §26 MiFIR. According to art. 2 MiFIR and art. 4 MiFIR, reporting obligations apply to investment firms (Wertpapierfirmen). Due to the great extent of the reporting as well as the sensitivity of the included information, NORD/LB will not implement §26 MIFIR transaction reports for clients.
In September 2018 a mandatory systematic internaliser determination based on previous business activities will occur for the first time.
At the moment, NORD/LB expects to continue acting as systematic internaliser in the future. In case of amendments NORD/LB will work closely with its client to assist them with reporting obligations.
Legal Name: Norddeutsche Landesbank -Girozentrale-
SI MIC: NLBX
Institutional Customers : +49 (0) 511 9818-9440
Savings Banks & Regional Banks: +49 (0) 511 9818-9400
MM/FX: +49 (0) 511 361-9460
Ships/Aircrafts: +49 (0) 511 9818-8150
Real Estate/Structured Finance: +49 (0) 511 9818-8150
Corporate Custumers: +49 (0) 511 9818-4003
FX/MM: +49 (0) 511 9818-4006
Financial Markets Trading
Frequent Issuers: +49 (0) 511 9818-9640
Below you will find the above information as PDF for download::
>Factsheet "NORD/LB as systematic internaliser" (PDF, 69 KB)
This Material was drawn up by NORDDEUTSCHE LANDESBANK GIROZENTRALE („NORD/LB“). The supervisory authorities in charge of NORD/LB are the European Central Bank („ECB“), Sonnemannstraße 20, D-60314 Frankfurt am Main, and the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleitungsaufsicht - „BaFin“), Graurheindorfer Str. 108, D-53117 Bonn, and Marie-Curie-Str. 24-28, D-60439 Frankfurt am Main. Details about the extent of NORD/LB´s regulation by the respective authorities are available on request. Generally, this Material or the products or services described therein have not been reviewed or approved by the competent supervisory authority.
This Material is addressed exclusively to recipients in Germany, the United Kingdom, Austria, Belgium, Italy, Spain, Denmark, Finland, Estonia, France, Greece, Ireland, Luxembourg, the Netherlands, Poland, Portugal, Sweden, the Czech Republic, Canada, Switzerland and Cyprus (hereinafter the „Relevant Persons” or „Recipients”). The contents of this Material are disclosed to the Recipients on a strictly confidential basis and, by accepting this Material, the Recipients agree that they will not forward to third parties, copy and/or reproduce this Material without NORD/LB’s prior written consent. This Material is only addressed to the Relevant Persons and any persons other than the Relevant Persons must not rely on the information in this Material. In particular, neither this Material nor any copy thereof must be forwarded or transmitted to Japan or the United States of America or its territories or possessions or distributed to any employees or affiliates of Recipients resident in these jurisdictions.
This Material was drawn up in compliance with the applicable provisions of the German Securities Trading Act (Wertpapierhandelsgesetz) and the Regulation Governing the Material of Financial Instruments (Verordnung über die Analyse von Finanzinstrumenten). In organizational, hierarchical, functional and local terms, the Research Division of NORD/LB is independent of any divisions responsible for the issuance of securities and investment banking activities, for trading (including proprietary trading) in and sales of securities as well as for lending activities.
This Material and the information contained herein have been compiled and are provided exclusively for information purposes. This Material is not intended as an investment incentive. It is provided for the Recipient’s personal information, subject to the express understanding, which is acknowledged by the Recipient, that it does not constitute any direct or indirect offer, recommendation, solicitation to purchase, hold or sell or to subscribe for or acquire any securities or other financial instruments nor any measure by which financial instruments might be offered or sold.
All actual details, information and statements contained herein were derived from sources considered reliable by NORD/LB. However, since these sources are not verified independently, NORD/LB cannot give any assurance as to or assume responsibility for the accuracy and completeness of the information contained herein. The opinions and prognoses given herein on the basis of these sources constitute a non-binding evaluation of NORD/LB. Any changes in the underlying premises may have a material impact on the developments described herein. Neither NORD/LB nor its governing bodies or employees can give any assurance as to or assume any responsibility or liability for the accuracy, adequacy and completeness of this Material or any loss of return, any indirect, consequential or other damage which may be suffered by persons relying on the information or any statements or opinions set forth in this Material (irrespective of whether such losses are incurred due to any negligence on the part of these persons or otherwise).
Past performances are not a reliable indicator of future performances. Exchange rates, price fluctuations of the financial instruments and similar factors may have a negative impact on the value and price of and return on the financial instruments referred to herein or any instruments linked thereto. An evaluation made on the basis of the historical performance of any security does not necessarily give an indication of its future performance.
This Material neither constitutes any investment, legal, accounting or tax advice nor any representation that an investment or strategy is suitable or appropriate in the light of the Recipient’s individual circumstances, and nothing in this Material constitutes a personal recommendation to the Recipient thereof. The securities or other financial instruments referred to herein may not be suitable for the Recipient’s personal investment strategies and objectives, financial situation or individual needs.
Also this Material as a whole or any part thereof is not a sales or other prospectus. Correspondingly, the information contained herein merely constitutes an overview and does not form the basis for an investor‘s potential decision to buy or sell. A full description of the details relating to the financial instruments or transactions which may relate to the subject matter of this Material is set forth in the relevant (financing) documentation. To the extent that the financial instruments described herein are NORD/LB’s own issues and subject to the requirement to publish a prospectus, the conditions of issue applicable to any individual financial instrument and the relevant prospectus published with respect thereto as well NORD/LB’s relevant registration form, all of which are available for downloading at www.nordlb.de and may be obtained, free of charge, from NORD/LB, Georgsplatz 1, 30159 Hanover, shall be solely binding. Any potential investment decision should at any rate be made exclusively on the basis of such (financing) documentation. This Material cannot replace personal advice. Before making an investment decision, each Recipient should consult an independent investment adviser for individual investment advice with respect to the appropriateness of an investment in financial instruments or investment strategies as contemplated herein as well as for other and more recent information on certain investment opportunities.
Each of the financial instruments referred to herein may involve substantial risks, including capital, interest, index, currency and credit risks, political, fair value, commodity and market risks. The financial instruments could experience a sudden substantial deterioration in value, including a total loss of the capital invested. Each transaction should only be entered into on the basis of the relevant investor’s assessment of its individual financial situation as well as of the suitability and risks of the investment.
NORD/LB and its affiliates may, for their own account or for the account of third parties, participate in transactions involving the financial instruments described herein or any underlying assets, issue further financial instruments having terms that are the same as or similar to those governing the financial instruments referred to herein as well as enter into transactions to hedge positions. Such actions may affect the price of the financial instruments described in this Material.
To the extent the financial instruments referred to herein are derivatives, they may involve an initial negative market value from the customer’s point of view, depending on the terms and conditions prevailing as of the transaction date. Furthermore, NORD/LB reserves the right to pass on its economic risk from any derivative transaction it has entered into to third parties in the market by way of a mirror image counter-transaction.
Further information on any fees which may be included in the sales price is set forth in the brochure „Customer Information Relating to Securities Transactions“ which is available at www.nordlb.de.
The information set forth in this Material shall supersede all previous versions of any relevant Material and refer exclusively to the date as of which this Material has been drawn up. Any future versions of this Material shall supersede this present version. NORD/LB shall not be under any obligation to update and/or review this Material at regular intervals. Therefore, no assurance can be given as to its currentness and continued accuracy.
By making use of this Material, the Recipient shall accept the foregoing terms and conditions.
NORD/LB is a member of the protection scheme of Deutsche Sparkassen-Finanzgruppe. Further information for the Recipient is set forth in clause 28 of the General Terms and Conditions of NORD/LB or at www.dsgv.de/sicherungssystem.