Greenwich Report: Liquidity and Pricing Top MiFID II Concerns

Greenwich Associates, April 2012, Pages: 7

Liquidity and Pricing Top MiFID II Concerns

Since the release of MiFID II, the financial services industry has been in discussions with the European Commission about several contentious provisions. This paper presents an update on the current state of these discussions, the major concerns expressed by buy-side and sell-side professionals taking part in those negotiations, the potential implications of the rules these professionals fear most, and industry suggestions for an alternative approach to achieving EU Commission goals.

Market participants say that the European Commission has recently listened more intently to industry concerns over proposed MiFID II regulations. High on the list of industry worries are MiFID II's pre- and post-trade transparency requirements. As currently structured, the regulation requires dealers to offer all clients any product price quoted to one client. On the back end of trades, the regulations seek nearly real-time reporting of transaction details, including price and volume.

Industry professionals fear these requirements will lead to unintended market effects such as higher fixed-income product pricing and reduced liquidity. Some industry representatives suggest the EU Commission employ alternative approaches to achieve the transparency it seeks, including increasing capital requirements and mandating central clearing.

Keywords:

MiFID II, EU, European Union, regulation, trades, buy-side, sell-side, transparence

1.Executive Summary

2.Introduction

3.Regulators Listen to Industry Reps

4.Pre-Trade Transparency
Implications: Innovation on the Way

5.Post-Trade Transparency
Implications: Can Transparency Sometimes Have Negative 6.Consequences?

7.An Alternative Model

8.Conclusion

9.MIFID II: THE PROPOSED NEW RUL ES YOU NEED TO KNOW

10.Key Pre-Trade Components of MiFID II

11.Key Post-Trade Components of MiFID II

Product Samples

A sample for this product is available. Please Login/Register to download this sample.

Customers who bought this item also bought

• MiFID Handbook 2008
• New EU Regulatory Environment Handbook 2009
• Retail Banker International (RBI)
• The Future of Regulatory Compliance: Strategies for a second wave of regulation
• MiFID: Convergence Towards a Unified European Capital Markets Industry
• Journal of Trading
• Not Every Bank is Goldman Sachs - Tracking the Rise of Algorithmic Machines and High Frequency Trading through a Deregulated Investment World
• World of Exchanges: adapting to a new environment
• European Single Financial Market 2006/07
• French Financial Advice Market