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[ M A R K E T with a decision. Another impact is that the trader needs more infor- mation to understand if the instru- ment being traded is subject to pre- and post-trade transparency.” The challenges, potential impacts and unintended consequences of the SI regime pose another question for market participants. Is there any benefit to registering as an SI? The buy-side is notorious for its wait-and-see regulatory approach and it would appear this has not changed with regards to SIs. The reporting and transparency re- quirements are a hot topic for asset managers who historically haven’t been burdened with the task. “For the buy-side guys who are hesitant on the issue, the point we try to make, because the buy-side does have a burden they want to minimise, is they should consider the regime strategically and from the perspective of a revenue oppor- tunity as opposed to the defensive perspective,” says Dermot Harriss, senior vice president at OneMar- ketData. A political failure Industry experts have also suggest- ed the regime could bring about improvements to price, meaning a newly established dose of healthy competition based on the allure of quotes for different instruments. “If the SI regime really does take off through 2018 we could start to see competition based on the attractiveness of the quotes. SIs offering price improvement could potentially have an advantage over trading venues restricted by a harmonised minimum tick size,” says Anne Plested, head of the EU regulation change programme at Fidessa. However, Mark Pumfrey, head of EMEA at Liquidnet, says the R E V I E W | S Y T E M AT I C regime will not only cause price improvement but also benefit the analysis of trading venues. The regime will produce useable data on the depth of liquidity and price quotes and offer an insight into how each SI operates, ultimate- ly helping meet compliance for MiFID II’s best execution requirements. “In the end it comes back to venues analysis, SIs can quote on what they want but it’s the execution that matters. That’s all we will be interested in if we go to SI venues,” Pumfrey says. Kay Swinburne MEP ad- dressed delegates in a keynote speech at the TRADE’s MiFID II pop-up event and explained institutions should consider the spirit of the regulation and the principle of the rules when explor- ing the specifics of SIs. She said it’s easy to focus on the details and forget the overarching principle of MiFID II and best execution is at the heart of this. “The compromise is clear…we are trying to persuade people to move onto the lit space and we would expect more transparency rather I N T E R N A L I S E R S ] “How do we move from one model to another when the whole network is interlinked?” REBECCA HEALEY, HEAD OF EMEA MARKET STRUCTURE AND STRATEGY, LIQUIDNET “I would expect people to continue to progress and use extra time to implement more strategic solutions.” JOE MCHALE, HEAD OF EMEA REGULATORY STRATEGY, BLOOMBERG LP than less. It would be deemed as a political failure otherwise. “MiFID II should be making markets more transparent and providing a better environment for all investors,” she said. Issue 51 TheTradeNews.com 53