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TradeTech poll: Over a third cast doubt over positive impact of MiFID II

First Published 26th April 2017

Over 1250 senior leaders in the equities trading industry gathered in Paris on 25 April 2017 for day one of TradeTech Europe. Live polling during the event found that the audience was split over the impact of MiFID II with over one third stating they do not believe that the regulation will make financial markets more efficient, resilient and transparent. Sixty-two percent of delegates stated that they were confident in their pre- and post-trade analytic capabilities on their block trades.

In the 'All Star Panel' session featuring speakers from Euronext, LSEG, Liquidnet, ITG and UBS, internal preferencing was identified among delegates as the biggest concern when it comes to bank-run dark pools. The biggest challenge in analyzing trade data was having platforms that can accurately collect data according to delegates in the 'Transforming Trading Through Smart Data' fire side chat with Euronext's Post Trade head, Andrew Simpson and Managing Director of Cubist Systematic Strategies, Ross Garon.

Comments from companies in attendance:

Louis Lovas, Director of Solutions at OneMarketData comments,
"The need for companies to manage more and more complex data to achieve and demonstrate best execution under MiFID 2 will be essential for making the financial markets more efficient. All of the transparency regulations are pushing in the direction of requiring the storage of more detailed information and firms need to be able to reconstruct a trade and that requires storing context information which can include non-digital aspects."

Yousaf Hafeez, Head of Business Bevelopment at Radianz Services, BT comments,
"The poll results seem to be reflective of the uncertainty around the interpretation of MiFID II. This seems to be particularly the case around block trading and dark pools."

Tom Doris, CEO at OTAS Technologies comments,
"Meeting best execution requirements will be essential for traders to ensure more transparency in the markets once the MiFID 2 requirements come into force. The use of AI tools can support this allowing human activity to be spent on more critical matters such as more complex trades.

Official polling results:

How confident are you with your pre and post trade analytic capabilities on your block trades?
Posted to Activity Stream
· Very confident with current capabilities - 19.1%
· Confident - 42.7%
· Not confident - 19.1%
· Investing heavily in new platforms for both - 19.1%

What are your biggest concerns with bank-run dark pools?
· How they are structurally operated? - 19.3%
· Internal preferencing - 36.8%
· External routing practices and procedures for sending trades outside their own trading venue - 17.5%
· Lack of evidence of operational structure - 26.4%

Do you believe that MiFID II will make financial markets more efficient, resilient and transparent?
· Yes - 44.7%
· No - 36.5%
· Undecided - 18.8%

What is your biggest challenge when analysing your trade data?
· Understanding exactly what data needs to be reported, when and in what format - 33.3%
· Getting good quality data from your broker - 0%
· Having platforms that collect accurate data - 50%
· The trading platforms are unable to collect cross-asset trade data - 16.7%