The TRADE 55 | Page 41

[ I N D E P T H | M I F I D I I ] filter through – but some market changes are clearly being felt already. Just one week into the new regime, the Europe equity research market saw a decline of $300 million in the wake of MiFID II’s new rules on unbundling payments for invest- ment research and execution fees. A study by Greenwich As- sociates found research and advisory budgets were reduced on average by 20% year-on-year, causing nearly $300 million to be wiped off its estimated $1.35 billion value, while firms in Continental Europe made more severe cuts, slashing eq- uity research budgets by 32%, although firms in the UK were more restrained and reduced budgets by 17%. What is evident is that MiFID II has placed more respon- sibility on the buy-side to ensure systems are working on a day-to-day basis as they should be, and to stay on top of trades that leave reporting obligations with the buy-side. Nevertheless, Hock at Union Investment concluded: “We will continue implementing new technology, improving our processes and continually training our traders to be more proactive with venues and organisations.” For a detailed review of how order flows have been affected by the arrival of MiFID II, see Hayley McDowell’s feature ‘Moving towards the light’ on page 58. How much of the dar k market done in bl will be ock s 12 mo nths from now? 40%-50% 36% 19% 30% or less 44% More tha n 50% Source: Audience poll at The TRADE’s MiFID II: Check In event Issue 55 // TheTradeNews.com // 41