The drive for greater transparency in financial markets will power into fifth gear from the start of January as the second iteration of Europe's Markets in Financial Instruments Directive (MiFID II) comes into effect.
MiFID II - the European Union's first regulatory update to the directive since 2004 - will kick in on Wednesday January 3 and is designed to make European markets safer and more transparent, as well as to identify and target conflicts of interest in trading. Critically for market participants, it will also fundamentally change the way trades are executed, reported and monitored. Multiple facets of the financial services industry will be affected, including investment and private banks, asset managers, broker-dealers, financial advisers and market infrastructure providers, including the London Metal Exchange and its clearing house, LME Clear. The push for greater transparency is of course admirable, but with it comes mounting concern the new regulations could disrupt trading and impose substantial extra compliance costs. The regulations contain a desire to push trade onto electronic venues and away from alternatives such as the telephone market and...