MiFID II introduces
fixed income pre-trade
transparency and our market
doesn’t work like that.
ASHLIN KOHLER, CITI
he TRADE’s MiFID II: Best
Execution event in October
brought together market
participants and industry
experts to discuss the impend-
ing MiFID II regulation. Held in Paris at Bloomberg’s
resident offices, several panels took to the stage to
explore algorithmic trading, best execution, Fin Tech
and unbundling requirements.
The overarching theme of this event was uncertainty
over specifics of the European regulatory rules.
MiFID II must be implemented by 3 January 2018,
with market participants expected to be well underway with plans. A recent report published and
authored by IHS Markit estimated the total cost of
implementing MiFID II for the buy-side alone at $1
billion – with total industry implementation expected
to cost over $2 billion.
The regulatory overview panel at the event discussed
in-depth the reporting requirements under MiFID II.
Experts highlighted that buy-siders are unaware of exactly what to report and penalties for failing to comply.
A member of the audience asked panellists whether
there is a risk the buy-side will
report every specification of a trade
and how the regulators would
handle this. Panellists were quick
to respond explaining buy-siders
have a responsibility under MiFID
II to not double report, and if they
do, it could result in fines.
Rachel Hutchins, who is part of
the trading solutions, compliance
and regulation team at Bloomberg,
explained to delegates that the
buy-side will likely struggle to keep
up with the colossal amount of
reporting as they have never had
to comply with this on such a scale
“Under MiFID I, the industry
understood that a lot firms get this
wrong. The sell-side certainly got
it wrong on occasions. But this is
a new thing for the vast majority of buy-side firms who, in the
past, have tried to avoid reporting
obligations under other regulations
like EMIR,” she said.
The panel agreed that the buy-
side face bigger problems when it
comes to complying with reporting
rules, as they have not had to deal
with such requirements before.
Ashlin Kohler, director of global
rates eCommerce FICC at Citi,
added: “The first thing to note is
that the buy-side didn’t catch on
that they actually had a reporting
requirement until quite recently.”
Tracking the status of firms iden-
tifying as systematic internalisers
(SI) under MiFID II, was acknowl-
edged by the panel as being anoth-
er problem ahead of the January
Under MiFID II, broker-dealers