Revocation of retained EU law Transitional amendments Amendments to the Markets in Financial Instruments Regulation (MiFIR) and the European Market Infrastructure Regulation (EMIR) Systematic internalisers Definition of a systematic internaliser
The definition of systematic internaliser brings together a number of concepts and calculations. In particular, a systematic internaliser will:
be an "investment firm": this is a person whose regular occupation or business is the provision of one or more investment services to third parties or the performance of one or more investment activities on a professional basis; 13
be "dealing on own account": this means that the investment firm (that is, the systematic internaliser) executes trades by trading against the investment firm’s own proprietary capital. Because the systematic internaliser uses its proprietary capital, it is legally considered to be a counterparty of the trade, and to take on risk from that trade; and
operate on an "organised, frequent, systematic and substantial basis": this concept is aimed at excluding from the definition investment firms who, though otherwise operating as systematic internalisers, only do so on an occasional, ad hoc and irregular basis.
	There are two notable features of the definition of systematic internaliser which concern the "organised, frequent, systematic and substantial basis" limb of the definition:
First, determining whether an investment firm is acting as a systematic internaliser involves looking at each relevant instrument. This is a result of the way in which Article 2(1)(12A) MiFIR provides what this basis is: "[F]requent and systematic" is measured by reference to each financial instrument the firm deals on, and "substantial" is measured by reference to each specific financial instrument the firm deals on. 14
Second, the way to determine what constitutes organised, frequent, systematic and substantial trading in respect of each such instrument is via a combination of quarterly calculations and quantitative thresholds specified in an onshored Commission Delegated Regulation (this Delegated Regulation is often referred to as MiFID Org Regulation) 15
	The Act removes the inherent requirement on firms to carry out complex calculations by substituting Article 2(1)(12) to (12A) MiFIR with a new definition of systematic internaliser. This definition retains the "organised, frequent, systematic and substantial basis" criterion but removes the role of calculations, in the MiFID Org Regulation or elsewhere, in determining the meaning of this basis, instead empowering the FCA to make this determination via rules.