What do you wish for in MiFID 2.1?
The European Commission is required to review MiFID 2 by March 2020. The German Finance Ministry kicked things off at the beginning of this year by inviting comments from the industry. Attending the recent FIA Compliance and Regulation Forum, I noted that many of the regulators and market participants... Read More
Contorted contraptions
Emotions are running high with ESMA’s announcement last evening on the share trading obligation and the immediate response by the FCA. Doubtless market participants had hoped for a more practical approach and are disappointed in a new regime that prevents EU27 investment firms from trading stocks... Read More
ESMA sheds light on OTC trade reporting under No-Deal
ESMA has released a statement which amongst other things includes clarification for EU investment firms that they will have to publish their OTC trades via an EU APA if a UK counterparty is involved. Whilst in Europe this approach may serve to ensure post-trade transparency within the EU27, it is also... Read More
Where will the liquidity shift within Europe?
Recently, Phil from the FT highlighted the risk for about 90 dual-listed companies under a no-deal Brexit. But I think the problem is much bigger. In our own analysis, we took it further and found about 230 liquid stocks (not necessarily dual listed) that had roughly a 50:50 split of turnover across... Read More
One year on and none the wiser
MiFID has achieved the rare feat of becoming a genericized trademark. In the same way that Xerox stands for copy machines in general, MiFID has turned into a synonym for all financial markets’ regulation. Thinking about its scorecard on its first birthday, whether MiFID II really is ground-breaking,... Read More
Setting a good example
Meanwhile in another part of Europe, time is running out for Swiss equivalence. The one year period previously granted in December 2017 is set to expire on 31st December. Switzerland needs equivalent third-country status in order to preserve the status quo and allow EU trading participants bound by MIFID... Read More
It is about time
Last Friday, ESMA finally published its long anticipated call for evidence on periodic auctions. Periodic auctions became popular in 2017 and even more so through 2018 and so they are often linked to the introduction of MiFID II. While some opponents lambasted them as a cynical attempt to avoid the double... Read More
Beyond the obvious choice
Many trading firms are looking towards multi-entity setups to prepare for Brexit. The larger firms tend to have subsidiaries or branches in place, so they already have a flexible hedge against any Brexit scenario. Unfortunately, this can be an expensive contingency plan. What if a firm can’t justify... Read More
FCA Brexit consultation offers alternative to noisy political debate
You might be excused for thinking that given the remaining Brexit uncertainty, contingency planning is something for policy wonks and lawyers. But this oversimplifies the situation, in particular since the FCA published two consultations on Brexit last week offering an unsentimental and technical analysis.... Read More
Get it done, while you still can
When the double volume cap (DVC) was first enacted on 12th March it cut nearly half of dark turnover in Europe. After a 6-month mandatory break all of the suspended stocks have now been allowed to re-join the general population. Early evidence suggests that overall dark trading has now resumed at roughly... Read More
Time to change your default settings?
London has long been seen as the European capital for financial markets. This has very little to do with regulation – after all, the UK is (still) part of the EU single market. London’s continuing dominance is largely down to ‘network effects’, i.e. the positive benefits of being... Read More
Joining the fray
It was always clear that Brexit was going to be an inherently complex undertaking that the industry must muddle through somehow. By now we’re all quite used to politicians of every stripe selling us their promises and claims, ranging from the more realistic to the less credible. What’s different... Read More
