ESMA MiFID II Compliance¶

MiFID II (Markets in Financial Instruments Directive II) regulates AI systems used in algorithmic trading, investment advice, and securities services.

Key Requirements¶

Algorithmic Trading (Art. 17)¶

Requirement	OxideShield Feature	Status
Kill switch capability	Emergency controller	✅
System monitoring	Telemetry	✅
Audit trail	Attestation layer	✅
Testing requirements	Red team scanner	✅

Investment Advice¶

Requirement	OxideShield Feature	Status
Suitability assessment	Policy engine	⚠️ Partial
Risk disclosure	PatternGuard	✅
Best execution	Under development	❌ Gap

Record Keeping (Art. 25)¶

Requirement	OxideShield Feature	Status
7-year retention	Attestation storage	✅
Order records	Audit logging	✅
Communications	Telemetry export	✅

Emergency Kill Switch¶

MiFID II requires algorithmic trading systems to have immediate halt capability:

# MiFID II compliant emergency configuration
emergency:
  enabled: true
  admin_token: ${EMERGENCY_TOKEN}
  auto_recovery_timeout_secs: 3600
  send_alerts: true
  alert_channels:
    - trading_operations
    - compliance
    - regulators

proxy:
  guards:
    - name: trading-safety
      type: PatternGuard
      config:
        patterns:
          - "market manipulation"
          - "wash trading"
          - "spoofing"
        action: block
        severity: critical

References¶

MiFID II - Directive 2014/65/EU
MiFIR - Regulation (EU) No 600/2014
ESMA Guidelines on Algorithmic Trading (ESMA/2016/1452)