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Six months after its launch, the Markets in Financial Instruments Directive (MiFID) has begun to stimulate greater competition between trade execution venues, but the fragmentation of liquidity and trade reporting has also caused confusion among buy-side institutions. Chris Hall reports.

MiFID Descends across Europe

A lack of headline-grabbing glitches had many dismiss MiFID as something of a non-event, following its launch last November. But after the hype came the reality. Buy- and sell-side firms have been getting on with the business of adapting to a new environment in which they must choose between venues for trading and trade reporting. While MiFID’s introduction was never likely to bring Europe’s equity markets to a standstill, the Directive’s teething troubles are now beginning to bite. Brokers admit that their clients face harder workloads as they adjust to an increasingly fragmented market. And with barely a multilateral trading facility (MTF) or dark liquidity pool out of the starting blocks, large asset managers are already complaining of the problems of aggregating liquidity and comparing transaction cost data.

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