As well as being a European rule, MiFID 2 may evolve into an unofficial international standard. Instead of having different procedures outside Europe, global asset managers have decided to unbundle research worldwide. More than half of the buy-side respondents to Liquidnet’s survey said they had done so and a further fifth said they would follow suit in the next five years. This makes competitive as well as administrative sense: clients may be drawn to fund managers who subject themselves to MiFID 2’s strictures.
Instead of creating a new trend, MiFID 2 may merely have sped up one that was already under way. Big investment banks have long been pulling away from the pack. The three biggest, according to McKinsey, had increased their share of the top ten sell-siders’ revenue from trading shares for clients by seven percentage points between 2014 and 2016. [...]
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