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01 October 2018

Financial Times: MiFID II starts to weave its influence through markets


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MiFID rules designed to curb inducements, which affected brokers who offered research for free as a ploy to attract managers to trade with them, have begun to hurt brokers, who have suffered a dramatic fall in commissions.


For more than seven years the shadow of Europe’s mammoth markets legislation, the Markets in Financial Instruments Directive II, hung over trading executives in the region. By the time it arrived in early January most were grateful that they could begin to move on from the endless policy debates and delays that had beset MiFID II as it was negotiated in Brussels. The updated rule book affects every corner of the continent’s financial services system. It was designed to offer greater protection for investors and inject more competition into the trading of all asset classes. For most market participants, it is too early to tell whether it will work — there has been little disruption in markets since its launch.

Looming over the implementation of MiFID II is the UK’s departure from the European Union, because many of the calculations in the rules assumed that London — the dominant market in Europe — would be in the bloc. Furthermore, any changes will be carried out after next spring’s European elections and jobs reshuffle in Brussels, by a new cadre of politicians and policymakers unused to the technical detail that dominates MiFID II discussions.

Full article on Financial Times (subscription required)



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