Reaction: “Day of the MiFIDs”
MiFID II, which goes live today, will create winners and losers across the financial industry.
Law firm Ashurst :
The Day of the MiFIDs has arrived. #MiFIDII
— Ashurst Regulatory (@AshurstRBC) January 3, 2018
Rebecca Healey, head of market structure, Liquidnet EMEA :
— Rebecca Healey (@_RebeccaHealey) January 2, 2018
“In reality, the start date may not provide much on the day itself; more likely, the delivery of a more transparent asset management industry will take time to evolve. Nevertheless, the date represents an important start in a new era in regulation, reflecting the cultural demand for greater accountability in financial services organisations. The only way to instigate real behavioural change is to make people accountable for their actions – and that is exactly what European financial regulation is intended to do. Believe it or not, there are reasons to stay positive about the future impact of regulation on European Capital Markets.”
- Nick Bayley, managing director at Duff & Phelps’ compliance & regulatory consulting practice, was formerly the head of the FCA’s MiFID II policy project. He said in an email that MiFID II has created, and will continue to create, winners and losers:
“There is certainly bountiful opportunity for the IT service providers charged with implementing the new record-keeping, best execution monitoring and phone recording processes. Large sellside brokers are also in an advantageous position, able to absorb the costs of research which will hit the smaller players. The new data requirements will also provide the FCA with greater oversight.
But then there are the losers: Along with smaller broker firms more reliant on research, there are the voice brokers, and buyside firms which have to deal with even more strenuous transparency and reporting obligations.”
Steve Grob, director of group strategy, Fidessa :
Storm in a tea cup – reflections on the first day of MiFID II https://t.co/pCyUsXHawf
— Steve Grob (@SteveGFidessa) January 3, 2018
“Now the day has come, two things strike me – first is the enormity of the industry effort involved in getting ready and, second, the almost complete insignificance of it all. The first is easy to understand – 10 years and 7 million paragraphs of new rules (thanks Phil at the FT for counting them all up for us). These then had to be read, interpreted, reinterpreted, coded, tested and implemented. Fidessa alone spent more than 10 thousand man days on this just in 2017, so who knows what the total industry bill is.”
FIA EPTA represents European firms who trade with their own capital:
As #MiFIDII starts to apply today after 8 years of review, EU financial markets will transform substantially. Towards more #transparency #stablemarkets and better #investorprotection – Principal Trading Firms stand ready to do their part! @EU_Commission @VDombrovskis @ESMAcomms
— FIA EPTA (@FIAEPTA) January 3, 2018
Catherine McGuinness, policy chairman of the City of London Corporation, said yesterday:
MiFID II launching tomorrow marks a real watershed moment for financial regulation. Read more here: https://t.co/UDox2THN3A
— Catherine McGuinness (@City_McGuinness) January 2, 2018
“The success and growth of the City can partly be attributed to a reliable and predictable regulatory system. This regulatory environment adds to our attractiveness as a leading, innovative global financial centre.
MiFID II marks a real watershed moment for financial regulation. It will be the last major piece of regulatory reform following the financial crash of 2008. Financial and professional services firms have worked hard in recent times to implement these onerous and complex changes.
While they have been a big distraction for firms, I am certain they are well-placed to strengthen their position in the global marketplace.”
- Harpal Sandhu, chief executive of FX trading platform Integral, said in a statement:
“It is important to remember that today by no means signals an end to the MiFID II efforts, in many respects it only represents the beginning. While market participants will generally expect some early leeway from local regulators, by the middle of the year, they will have to demonstrate full compliance or risk suspending the non-compliant parts of their business.
“Therefore, as FX firms begin gathering feedback from regulators, they will inevitably need to make upgrades to their trading systems and processes. This is a particularly daunting task for firms that have built in-house systems designed to comply with their initial interpretations of MiFID II. These complicated systems require tremendous resources to develop and maintain, and understandably many firms are experiencing MiFID II fatigue.”
Alex, the cartoon about a senior banker at Megabank in the City of London, also noted the start of MiFID II;
— Alex Masterley (@alexmasterley) January 3, 2018
Periodic auctions provide an on-exchange alternative for executing block trades.
The fund association wants improved ESG data and non-financial reporting.
ESMA said it has not identified any major disruptions so far in the functioning of trade repositories.
AFME said the COVID-19 recovery is being led by record issuance of investment grade securities and ESG bonds.
The failure of one CCP has the potential to cause serious systemic risk across the EU.