[ I N D E P T H | R E G U L A T I O N ]
DARK TRADING : navigating a post-Brexit divergent world
Following the European Commission ’ s recent changes to the MiFID II regulation , Annabel Smith takes a look at the UK and Europe ’ s opposing approaches to dark trading and market transparency post-Brexit and the potential for a fragmented liquidity landscape .
Brussel ’ s changes to MiFID II as part of its Capital Markets Union ( CMU ) review in November reaffirmed Europe ’ s stance on dark trading . Since the implementation of MiFID II in 2018 , the continent has made it clear that it intends to hold transparency above all else in a bid to foster protection for retail investors in the capital markets , a crusade that would have included the UK , had it not been for Brexit .
However , following the UK ’ s departure from the European Union , the two parties have had opposing priorities . While the EU has been focused on continuing to curb the growing amount of volumes taking place off-book , the UK has been intent on reinventing itself to make it a more attractive place to do business following the loss of almost all its EU share trading business back to the continent .
24 // TheTRADE // Winter 2021