MiFiD ||

MiFID II is the commonly used acronym for the revision of the Markets in Financial Instruments Directive (2004/39/EC) adopted in 2007, commonly known as MiFID I (Markets in Financial Instruments Directive).

Components of the Directive?
Part of these MiFID II guidelines are, among other things, the technical standards. These also include very specific regulations that focus on the “Level of Accuracy of Business Clocks”, i.e. the time synchronization in the IT system.

What is important to consider?
UTC is used as the time stamp reference time for “Business Clocks used by Operators”. In contrast to the past, only a deviation of 100 µs is allowed, which affects the accuracy compared to UTC at application level. The requirements for the resolution of the time stamp, which may often only be 1 µs, have also been tightened.

The reason for the suitability
Trading speed: Synchronization in milliseconds enables market participants to effectively execute their trading strategies and react to the smallest price fluctuations.
Transparency and traceability: Accurate time stamping allows regulators to track the progress of trades and identify possible manipulation or abuse.
Best Execution Policy: MiFID II contains provisions on best execution. The aim is to ensure that an order is executed at the best possible price, taking into account other relevant factors.

Important to know!
Conventional NTP servers are no longer sufficient for the exact time synchronization of such financial systems and their process runtimes. The fact that PTP time servers according to IEEE 1588 must be used to implement the MiFID II requirements is now generally recognized in the professional world.

What about the future?
It is unlikely that it will be possible to offer only one standardized and uniform system and device solution for all applications. This is because not only the pure product specification of the PTP time server – in our case this would be the DTS 4160 grandmaster – is essential for this, but also a wealth of project-specific issues.