MiFID II - New licence obligation

The expansion of the licence obligation under MiFID II is an important part of the revision of MiFID I. New market participants that are newly subject to the licence obligation of MiFID II included proprietary traders who were previously exempt.

Examples of proprietary traders are:

  • certain commodity traders
  • traders in emission rights
  • legal entities and persons who trade as market makers on the (non-commodity) derivative market
  • members and participants of regulated non-commodity markets
  • legal entities and persons who engage in high frequency algorithmic trading
  • legal entities and persons with direct electronic access (see exception below) in non-commodities.


Non-financial entities with direct electronic access can be exempt from the licence obligation. The condition for this is that these non-financial entities only execute transactions that reduce the risks of their commercial activities or of the management of their own cash or the cash of the groups to which they belong.

Emission rights are classified as financial instrument under MiFID II. Therefore, market participants who provide investment services in this field be required to have a licence. In addition a new platform has been will also be introduced, the Organised Trading Facility (OTF). Also the licence regime has changed for investment firms from outside the EU who wish to engage in activities within the EU will also change. Finally, a licence obligation has been introduced for a new group of companies: data reporting services providers.

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