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The Trading Mesh

Regulation Matters (Fidessa)'s Blog

What’s missing from ESMA’s report?

September 29, 2015 Comments (0)           

By Christian Voigt

Yesterday saw the publication of ESMA’s long-awaited report on the technical standards for MiFID II / MiFIR. As well as reviewing every single word of this impressive tome – 1,532 pages spread across three documents – we should consider the wider scope and take note of what the report does not cover too.
Comparing the drafts from December 2014 and February 2015 with yesterday’s texts, it suggests that ESMA still needs...

MiFID II deadlines under further pressure

May 15, 2015 Comments (0)           

By Christian Voigt

The European Commission (EC) and ESMA have agreed on an improved process to draft the Level 2 texts for MiFID II. On the back of those discussions, ESMA asked for a 3-month extension on their own deadline to submit draft technical standards and the EC granted it. While the next Level 2 drafts will now not be published until September 2015, the benefit is that further changes are less likely. It is certainly better for everyone that ESMA and the EC avoid...

Change is the only constant

March 20, 2015 Comments (0)           

By Anne Plested
The unbundling of payment for research is a top concern for the industry. There seems to be general acceptance that, one way or another, Europe is set on the soft dollar research market becoming a hard dollar one by January 2017. Despite calls for more clarity and the recent publication of the FCA discussion paper on the regime, opinion remains divided as to how the use of CSAs can evolve to survive as a payment mechanism. There’s no denying widespread...

Return of the concentration rule

February 4, 2015 Comments (0)           

By Christian Voigt
A long time ago in a galaxy far, far away…
It is a period of calm, with primary exchanges enjoying relatively little competition thanks to concentration rules enforced in many EU countries requiring all equity business to be conducted on exchange. The arrival of a new disruptor, in the form of MiFID I, is about to turn their lives upside down forever. The blanket ban on concentration rules will allow many newcomers to start competing for business, introducing a...

Wanted: Home for OTC trading

September 8, 2014 Comments (0)           

By Christian Voigt
With MiFID II’s stated aim to push OTC trading (where appropriate) onto regulated platforms European market structure is undergoing considerable upheaval. As the first round of Level 2 consultation has just finished it’s now time to define what OTC trading is appropriate and where it can be executed. While double volume caps somewhat restrict the use of transparency waivers, Systematic Internalisers (SIs) appear to be a possible home for some OTC...

Higher hurdles for smaller firms?

June 27, 2014 Comments (0)           

By Christian Voigt
Direct market access (DMA) forms a significant part of the market given the regulatory hoops and high fixed costs that a full exchange membership implies. While today large trading firms may let their existing memberships to smaller trading firms, similar to a company sub-letting spare office space, the current MiFID II discussion paper suggests that the well-established DMA model may face some threats. For example, ESMA wants DMA providers to apply to their DMA clients...

Algo identifiers galore

April 7, 2014 Comments (0)           

By Christian VoigtWith the German algo ID mandatory from 1st April, I was prompted to scan the latest MiFID II texts in this regard. Member states must require exchanges to be able to identify the different algorithms used for generating orders (Art. 51.6) which, on a high level, sounds just like the German HFT Act.
To make things even more complex, MiFIR requires investment firms to identify in their transaction reports the “computer algorithms [.…] responsible...

Smoke-free markets

December 11, 2013 Comments (0)           

 
This article was originally published at the Fidessa Regulation Matters blog, and is reproduced here with permission.
 
By Christian Voigt

In recent months regulators have increased their focus on detecting and reporting possible incidents of market abuse. In Europe trading firms are expected to check for potential offences and report their suspicions to the regulator. As part of the MAD Review, the current list of indicators for market abuse will be promoted from a...

Hitting the bullseye

December 2, 2013 Comments (0)           

 
This article was originally published at the Fidessa Regulation Matters blog, and is reproduced here with permission.
 
By Christian Voigt

According to recent press articles, the MiFID II trilogue has agreed on capping dark trading at an arbitrary 4% per venue and 8% overall market share. At the heart of the discussion around dark trading lies the role of transparency in the wider market. While one side claims that transparency is the only thing that can keep...

Get with the programme

November 12, 2013 Comments (0)           

 
This article was originally published at the Fidessa Regulation Matters blog, and is reproduced here with permission.
 
By Mark Brennan

Electronic trading of swaps will soon be mandatory and industry participants need to get ready. Javelin kicked off the process on October 18th, filing its MAT (Made Available to Trade) submission with the CFTC for a broad range of interest rate swaps, including spot and forward starting swaps and variable notional swaps, with tenors...