Global Custodian | By: Tony Freeman | GPE – September 20, 2017:
The implementation of MiFID II in January 2018 is being predicted by many market participants as a Big Bang moment for Europe’s financial markets. This is because the scope of MiFID II/MiFIR is so wide-ranging and covers a much broader range of financial instruments and activities than its predecessor, MiFID I. It includes new rules on investor protection, trading platform classifications and associated rules, more stringency on best execution requirements and greater transparency around trade execution.
Further, MiFID II is extra-territorial – many firms outside of the EU are beginning to realise that they will be captured in the new rules when trading in European securities or with EU regulated firms.
For example, this applies to the MiFID II rule on the unbundling and transparency of payment for sell-side research.
While there has been much discussion around how MiFID II will impact the trading landscape of Europe, thus far little has been written about the effect of the forthcoming regulation on the post-trade space.
In reality, MiFID II will dramatically alter the post-trade landscape and will require affected firms to make significant changes to their middle and back office activities in order to comply with the new requirements.
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