counterparties are before assuming
they are unaffected.
“On the issue of unbundling,
there is a lot less clarity,” says
subsidiary, they may still find
themselves needing to look at
their commission payments again,
as global investors may come to
expect the kind of granular pricing
information that they will now
receive from their European asset managers and may
demand the same of US firms they work with.
But perhaps the most difficult issues for US firms to
handle are the subtle changes to market structure and
how this will affect their ability to trade in Europe.
For example, caps on dark trading activity are
expected to result in a move towards larger trades
in Europe and the caps could mean US investors are
taken by surprise when they cannot trade a particular
name in the dark due to the cap.
Sapient’s Digiammo says: “We’re starting to see some
people come across this issue in the US and we’re also
seeing more innovation in the block trading options
available to US investors that will become necessary
Regulatory reporting issues are also likely to trip up
those investors outside of Europe trading in the juris-
diction, Digiammo adds.
“I think one of the biggest issues investors here will
face is the dual reporting standards for OTC deriva-
Simpson agrees and says transparency in pre- and
post-trade will be a big focus when MiFID II is imple-
“There is going to be a huge amount of additional
trading data available. Europe is creating very transparent markets with MiFID II. This could even make
EU markets more attractive for US investors in the
long-run,” Simpson explains.
End the apathy
The list of potential issues for non-EU investors goes
on, there are hundreds of pages of regulation surrounding MiFID II, along with various consultation
papers, public statements and individual member state
It can seem alarmingly complex to the point of making traders outside the EU want to bury their heads in
the sand, but this could be a mistake.
“There has been a real slowness to take up to this
“We’re also seeing more innovation
in the block trading options
available to US investors that will
become necessary from 2018.”
JOE DIGIAMMO, DIRECTOR, SAPIENT