Are we nearly there yet?

There has been a small flurry of activity this week around the subject of a European consolidated tape, but is the fog starting to clear yet? Let’s take a closer look at the facts. The parliament adopted text of MiFID II calls for an effective and comprehensive consolidated tape to be in operation as soon as possible. The scope is post-trade data for equities and equity-like instruments, though non-equities will follow later. The objective, as far as MiFID II states, is that... Read More

Keeping tabs on short sells

Looking through the EP adopted text of MiFIR, I am surprised to see that transaction reporting obligations include a designation to identify a short sell, as defined in the newly introduced short selling regulation. I thought the regulator had done with that! Principal business sellers would need to dynamically track their inventory across all business lines to determine if they own the shares at the time of entering into a trade. So even with firms given until the close of the... Read More

Extraterritoriality reality?

Legislators and regulators all around the globe are rushing to meet the G20 commitment of shifting all standardised OTC derivative contracts onto exchanges or electronic trading platforms. Naturally, every country is trying to clean up its own backyard before looking across the fence at its neighbour’s. The disadvantage of this approach is that country-specific rules might not necessarily harmonise with each other. Exactly this issue was escalated in the Commodity Futures... Read More

My Roman travelogue

Separate from the upcoming European Commission proposal for a financial transaction tax (FTT) under ‘enhanced co-operation’, Italy is pushing ahead with its own flavour of FTT, similar to the French tax which came into effect in August this year. It took me longer than I expected to find something sensible about the Italian proposals. Reports in the Italian media were a little sketchy and reference to Government papers led me through something of a legal maze. Providing the... Read More

Another day, another document!

We now have the European Parliament adopted texts of MiFID and MiFIR under our belts (as of 26th October), but in order to complete the process of agreeing Level 1 there needs to be agreement from the Council of the European Union on what is known as the Presidency Compromise text. In the interests of transparency the Council is publishing every version of the compromise text as it inches closer to its final approach. The current aim is to reach an agreement by 4th December. Of... Read More

Is the grass any greener on the other side?

On 30th October the CFTC’s Sub-Committee on Automated and High Frequency Trading Working Group 1 presented its definition of HFT to the CFTC Technology Advisory Committee. This is very interesting, as the European Parliament already published its version on 26th October. Let’s compare notes across the pond. Both approaches define HFT as a sub-category of algorithmic trading. However, the EU Parliament defines HFT and, separately, a HFT strategy. For simplicity, the... Read More

Market standards and the warm embrace of regulators

On 30th October the CFTC held a Public Meeting of the Technology Advisory Committee. Among other things, the possibility of a new Quality Management System Standard for automated trading was discussed. The AT 9000 standard is aimed at market system quality for automated trading in the financial industry. A preliminary timeline tells us that an informal working group started in July this year and indicates that the AT 9000 standard could be in place as early as the end of 2013. Standards... Read More

The liquidity genie

Following on from the warnings to the contrary from the UK Foresight publication (see previous blog Some things in life are bad…), we have had a reaffirmation (if one was needed) last Friday from the plenary vote that the European Parliament is going to proceed to target speculation and high frequency trading through their new rules and regulations. The magic of the “Liquidity Genie” is at the heart of Foresight Project’s report and has long been right, left... Read More

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