Follow Us

Follow us on Twitter  Follow us on LinkedIn

News

Summer holidays from today … back on 9th September! I wish all my readers Happy Holidays – wherever you are allowed to go!

Why not try our new service? Brexit and the City - the Impact

"Brexit has ended the Golden Age of the City" video with Federal Trust Director Brendan Donnelly

Brexit and the City of London: April 2021 Video Update

 

13 March 2018

Financial Times: Brexit threatens to undo Mifid II dark pool rules


Default: Change to:


European stock trading has entered a new era with the introduction of caps on the volume of business that can be traded in private venues known as dark pools. Yet this regime may be short-lived and possibly a waste of time and resources.


There are questions being asked whether equities trading is any more transparent, which was the original intention of regulators. But there is another factor that is likely to prompt big changes — Brexit. The case to watch is Switzerland, which does not have dark pool caps and accounts for just over 7 per cent of all European share trading by notional value, according to Cboe Europe data. It is included in the calculations because it has struck an equivalence deal with the EU. The UK may reach a similar deal on share trading equivalence with Brussels. Switzerland’s market share has largely been unaffected by the arrival of Mifid II. There have been some glitches since Mifid II began in January but UK-based EU trading venues effectively ignored the rules to compete with the Swiss. Moreover, regulators unofficially turned a blind eye as they sought to recast the rules. While regulators keep working, EU venues may ultimately find it difficult to compete against London’s gravitational pull as it already trades just over half of the European market.

But the UK may not seek an equivalence here. The Financial Conduct Authority is more comfortable with dark pools, and the Mifid rules have a disproportionate effect on London markets.

Full article on Financial Times (subscription required)



© Financial Times


< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information



Add new comment