With only a few months left until MiFID II comes into effect, market participants have a relatively
clear idea of the impact the new
regulation will have on their business. But in terms of transparency,
can you reiterate the high-level
implications from a TRADEcho /
trade reporting perspective?
First and foremost, transparency
is a fundamental cornerstone for
efficient markets. Transparency
helps in creating fair markets and
a level playing field for all market
participants – investors as well as
intermediaries. Transparency is
fundamental to price formation
and trade decisions and gives
people an incredibly important
overview of markets. In short,
Until now, some financial markets
have operated in a rather opaque
way. While equities and equity
related instruments have provided
a clear view of the volume and
prices transacted, other markets
have not been as transparent. In
this context, MiFID II will be a
great equalizer in terms of trade in-
formation, thereby creating greater
overall efficiency in the financial
Before discussing further details
and implications, one can summarise the main changes in the
transparency space between MiFID and MiFID II as:
1) Instrument coverage under
MiFID is extended to a much
larger universe, including fixed
income and derivatives instruments, under MiFID II.
2) More defined rules around who
has the reporting obligation.
MiFID II therefore implements
stricter requirements for both
sell and buy-side to contribute
to the regulatory transparency.
3) Restrictions to “traditional”
bilateral OTC trading resulting
in increased use of Systematic
Internaliser regime and MTF/
OTF venue trading.
Can you go into more detail about
how the changes in data availability will affect the markets post-MiFID II?
Up until now, a great deal of the
MiFID II conversation regarding
data has been on the burden of
transmission and challenges of
getting this right. At TRADEcho,
we have spent the entirety of
the past two years analysing and
educating the market about this,
whilst building a solution that
publishes the correct trade reports
within the regulatory timeframe.
We are no strangers to this task,
Per Lovén, commercial director at TRADEcho, outlines the
practical implications of MiFID II on trade transparency, and
explains how the new regulation will affect the markets.
MiFID II and trade
note from Per Lovén
62 TheTrade MiFID II HANDBOOK