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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