K&KGC
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K E Y F I N D I N G S F R O M 6 TH AT F G L O B A L S U M M I T
The impact on
fixed income trading
from MiFID II
T
he overall levels of liquidity have remained
stable throughout the first month of MiFID II
but the buy side have reported a significant
increase in electronic trading. Electronic RFQ
remains the preferred means of trading liquid
bonds and block sizes. The buy side now have more
means to trade less liquid bonds through Axes, RFQ and
voice. A few electronic venues are starting to distinguish
themselves with their strengths.
Many brokers were unprepared for the Systematic
Internaliser regime but thanks to electronic platforms
and the new processed trade services, any issues from a
trade reporting perspective, were minimised.
The buy side are disappointed that the highly anticipated
benefits of MiFID II from higher levels of transparency are
diminished by the deferral regime where only 804 out of
ESMA’s 69K ISINs are deemed liquid and will therefore be
subject to deferred reporting.
The buy side reported third party dependencies as the
major cause for the regulatory reporting challenges. The
majority of buy-side firms in continental Europe have
however registered their funds under the UCITS regime
already in 2017 so they are not subject to the same
reporting obligations.
The buy side are poised to develop their data capabilities
in 2018 for better informed decision making. There is
going to be a great opportunity for TCA/best execution
analytics and low touch auto execution vendors to make
a mark among the fixed income buy side traders.
The next Alpha Trader Forum fixed income
spring 2018 roadshow dates are; 15 th May in
Paris, 17 th May in Frankfurt and 5 th June in
London.
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Spring 2018
www.buysideintel.com
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