During a sustained period of low interest rates, the market for equities has increasingly come under the investment spotlight.
On 3 January 2018, the European market underwent the largest regulatory overhaul in a generation. This major change came in the form of the Markets in Financial Instruments Directive (MiFID) II. The objective of the regulation was to improve transparency and open up the markets to foster greater competition, all to the ultimate benefit of the end investor.
As a global financial markets infrastructure business, London Stock Exchange Group was closely involved in every step of the MiFID II journey, responding to regulators’ consultations, evolving our services, and collaborating with our members to ensure a smooth and positive transition into the new market landscape.
It is with this spirit of collaboration in mind that we will be travelling to Leeds later this month to meet with some of our key Yorkshire-based members. These firms cover a range of investment services across execution only, advisory and discretionary businesses. We shall be canvassing them for feedback on our products and services, and asking how we can help these brokers better serve their investors following the MiFID II transition and beyond.
When it came to defining the new directives for financial markets, increasing transparency was a core focus for the regulators. One way of achieving this was to encourage more trading activity to be transacted on exchanges, and away from anonymous trading venues.
Other technical changes included more detailed reporting requirements from market participants and trading venues, alike. This has contributed to the trend for ever more investment and trading decisions to be driven by data, meaning that service providers and
trading venues have been compelled to demonstrate the value they are adding to the process.
At London Stock Exchange, we have seen significant changes during the first half of the year in terms of on-exchange traded activity. We reported record volumes during the first three months of the year, with January to March being the busiest first quarter in 10 years.
We’ve also seen our specific MiFID II-compliant solutions gain momentum and popularity with members as the exchange looks to innovate and provide new for trading. This increase in activity can be attributed in part to the change in the regulatory landscape, but also to our longstanding commitment to collaboration and partnership with our member firms.
Six months on from the regulation’s implementation, MiFID II is undoubtedly one of the most significant changes the industry has ever faced.
But there’s no time to stand still: it’s crucial for us to now reflect and plan for the future. For London Stock Exchange Group, that
will mean continuing our culture of innovation and collaboration with member firms to deliver effective ways of trading the markets.
To find out more about how the market has adapted to MiFID II please visit: