The marketplace is whirring with great minds turning their attention to what the latest ESMA rules for MiFID II actually mean. We’re not sure anyone has completely figured that out yet, but we’ll be watching closely as we’re embroiled in a number of projects that are impacted to various degrees by the latest ESMA utterances, which emerged earlier this week.
Our early assessment is that, once all is said and done with MiFID II, the base trading landscape across the EU will more closely resemble that in the US. Indeed, I’m heading to New York next week to co-host a breakfast seminar with Interxion and McKay Brothers at which we’ll make the case that Europe should feature in US prop trader/market-makers’ trading strategies.
Without stealing my own thunder, our research indicates that MiFID II’s emphasis on transparency and market integrity will go some way toward creating a homogenous European trading environment. At the same time, nuances across individual markets, market centres and asset classes – as well as the kind of volatility you’d expect in a market serving a population of some 500 million – create opportunities for profit.
Meanwhile, the lack of a consolidated order book – even under MiFID II – creates the need for firms to aggregate their own, making the choice of collocation partner. With the emergence of new microwave and milliwave connections, particularly in and around London and out to Frankfurt, a Central London base is becoming more compelling.
If you’re interested in hearing more, get in touch and we’ll try to squeeze you in to our seminar, which is next Friday October 9. If you can’t make it, don’t fret as we’ll be putting out a paper around this topic very soon.
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