“ All of these external changes need to be taken into account in terms of how you calibrate your execution platform and your smart order router and how you interact with the market .”
EXECUTION POLICIES MiFID II is specific in its requirements for execution policies , stating that buy-side firms must provide appropriate information to their clients on their order execution policy . “ That information shall explain clearly , in sufficient detail and in a way that can be easily understood by clients , how orders will be executed by the investment firm for the client ,” ESMA says .
Furthermore , investment firms need to obtain the prior consent of their clients to approve the order execution policy .
Investment firms are also required to demonstrate best execution not only to their clients , but now also to their Member State national regulator on request .
MiFID II addresses concerns about the generic and standardised nature of many firms ’ order execution policies , by stating that firms ’ order execution policies have to be clear , easily comprehensible and sufficiently detailed so that clients can easily understand how their order will be executed .
For each class of financial instruments , the order execution policy needs to include information on the different venues where the investment firm executes its client orders and the factors affecting the choice of execution venue .
MiFID II states that … “ it shall at least include those venues that
WHEN EVALUATING SALES TRADERS , THE ONES WHO UNDERSTAND YOUR TRADING STYLE , WHO ARE FAMILIAR WITH YOUR HOLDINGS AND KNOW YOUR OBJECTIVES AND LIMITATIONS , ARE THE ONES WHO ARE MOST VALUABLE .
NEIL BOND , EQUITY DEALER AT ARDEVORA ASSET MANAGEMENT
enable the investment firm to obtain on a consistent basis the best possible result for the execution of client orders .”
BIG DATA As detailed elsewhere in this handbook , a major consequence of the MiFID II regulatory changes is the creation and retention of huge amounts of data . However , the industry contains differing opinions as to whether this is actually worthwhile .
“ MiFID II will require a great deal of data to be collected and analysed ,” says Bond . “ This will impact the smaller firms much harder where technical resources are more limited ,” he warns .
Technology is vital here . Neal Hallett , head of EMEA cash trading at Barclays , says the bank is continually developing technology to capture client intentions , benchmarks and performance across business streams .
“ Given the huge amounts of data and speed required ,
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