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 initial impact of
MiFID II
on equity trading
T
he senior buy-side heads of trading reported
at the 6th Annual ATF Global Summit that
some of the expected impact of MiFID II had
been softened due to the delayed dark cap
and LEI regimes.
The buy side are reportedly already trading more LIS on
MTFs and in particular conditional venues seems to have
gained market share. Exchange driven auctions have
also gained traction but the majority of the flow is broker
preferenced and it is not interactable liquidity. The
systematic internalisers (SIs)s with a Central Risk Book
(CRB) are making an effort to win market share.
The spreads for large cap have narrowed and there are
some indications that the minimum tick size regime
has widened the spreads for small cap stock. Brokers
are trying to charge a premium for any forms of scarce
liquidity but the buy side face challenges within their
OMS to handle different rates.
From a reporting perspective, the buy side reported
third party dependencies as the major reason for trade
and transaction reporting teething problems. A large
proportion of buy-side firms in continental Europe
made an effort to register their funds under UCITS in
2017 which helped them reduce the need for trade and
transaction reporting which has been a major challenge
for MiFID registered firms in the first month of MIFID II.
From a market efficiency perspective, whilst there
is a wider variety of venue choices, at least there is
more choice. The buy side would need the broker’s
harmonisation challenges with inconsistent reporting
of FIX tags to settle to get access to vastly improved
granular market data. The major anticipated
improvements from MiFID II is hopefully going to be a
closer interaction between the buy side and sell side and
better data for more informed decision making.
The next Alpha Trader Forum equities spring
2018 roadshow dates are; 15 th May in Paris, 17 th
May in Frankfurt, 30 th May in Stockholm and 5th
June in London.
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Spring 2018
www.buysideintel.com
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