LMAX divides into two FCA regulated companies due to MiFID II: MTF and Broker


LMAX Exchange Global MiFID II

Institutional FX player LMAX Exchange Group has announced (see full text below) that it has divided the company’s operations into two distinct, separate FCA regulated entities:

LMAX Global, the operating name of newly formed LMAX Broker Limited, a broker offering other brokers and professional traders the ability to trade on the LMAX Exchange central limit order book.

LMAX Exchange, the operating name of the company’s existing entity LMAX Limited – a multilateral trading facility (MTF) providing institutional FX matching.

LMAX made the change since under MiFID II rules which take effect today (January 3, 2018), MTF and broker businesses must be operated as two distinct legal entities. An MTF operator is not allowed to execute client orders against proprietary capital or to engage in matched principal trading on its own MTF.

MiFID II has received a lot of attention in the FX world for issues relating to client data validation, and trade reporting. However in the ‘big picture’, most of  MiFID II’s game-changer rules deal with separation – for example, separation of research and investment services which is causing a lot of flack on Wall Street and in The City, and separation of various services such as broking and running an exchange, which is the issue LMAX was faced with.

The company noted that clients of both LMAX Global and LMAX Exchange will continue to have the same direct access to all LMAX markets globally, streaming no ‘last look’ liquidity and precise, consistent exchange quality execution within a regulated, rules-based trading environment.

LeapRate has learned via regulatory filings that LMAX, in anticipation of the new MiFID II rules, set up the new LMAX Broker Limited on June 14 of last year, receiving separate FCA licensing for that entity on December 15. Some of LMAX Limited’s capital was transferred to the new LMAX Broker Limited on December 14.

Over the past two months, LMAX has been working to transfer its broker clients to the new entity.

The full LMAX announcement on the matter follows:


LMAX Exchange Group launches LMAX Global, a new fully regulated FCA broker alongside the regulated LMAX Exchange

Move separates its MTF and broker businesses to comply with MiFID II, driving transparent pricing and consistent execution for clients

London, 3 January 2018 – LMAX Exchange Group, one of the UK’s fastest growing technology companies and the leading advocate of enhanced transparency and fairness in FX trading, welcomes MiFID II. To meet the regulatory changes under MiFID II, aimed at improving transparency in financial markets, the company has completed the transition of its MTF and Broker businesses into two distinct FCA regulated entities: LMAX Exchange and LMAX Global, both now part of the LMAX Exchange Group.

David Mercer LMAX CEO
David Mercer, LMAX Exchange Group

David Mercer, CEO of LMAX Exchange Group commented:

MiFID II’s underlying message is about fairness and transparency, which we wholeheartedly support. We have long been an advocate for complete transparency on trading costs and execution quality, and our exchange style execution model was designed specifically to treat all market participants equally regardless of status, size or activity levels. We welcome the introduction of MiFID II and we are pleased to assure customers that they will receive the same transparent, precise and consistent execution, with no ‘last look’ as standard.

Under MiFID II, MTF and broker businesses must be operated as two distinct legal entities as an MTF operator is not allowed to execute client orders against proprietary capital or to engage in matched principal trading on its own MTF. In accordance with the regulatory changes, LMAX Exchange Group has successfully transitioned the part of its business that serves brokers, money managers and non-institutional accounts to a new FCA regulated broker called LMAX Global, which offers clients global access to LMAX Exchange firm liquidity and unparalleled exchange quality execution. There are no changes to the customer experience, with account numbers, trading access and charges remaining exactly the same.

LMAX Exchange will continue to operate as an FCA regulated MTF serving institutional clients trading spot FX, precious metals and indices.

Clients of LMAX Global and LMAX Exchange will continue to have the same direct access to all LMAX Exchange markets globally, streaming no ‘last look’ liquidity and precise, consistent exchange quality execution within a regulated, rules-based trading environment.

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LMAX divides into two FCA regulated companies due to MiFID II: MTF and Broker

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