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Research has found 89% of stocks in the FTSE 100 and FTSE 250 will breach MiFID II’s
dark trading market-wide cap come January 2018. A report from Rosenblatt Securities
measured how the dark trading caps would affect trading in 757 stocks across 18 major
European indexes, with data provided by Bats Europe. It found just fewer than three-quarters of stocks would hit the 8% threshold, with UK and Irish stocks hit hardest.
Nine-in-ten FTSE 100 stocks to
hit dark cap in January
After months of controversy surrounding the systematic internaliser (SI) regime under
MiFID II, the European Commission has made its move to shut down a potential loophole.
An amendment to the rules means banks operating as SIs will not be able to recreate
broker-crossing networks through matching client orders as an exchange operator would.
European Commission finally
shuts down SI loophole
The UK’s financial watchdog has found dark trading begins to negatively affect market
quality between 11% and 17% of market turnover, much higher than MiFID II’s proposed
dark pool caps. The study authored by the Financial Conduct Authority (FCA) looked at
the 350 largest UK stocks traded across the four main trading venues in London.
FCA study highlights dark
trading cap problems