BØRSMÆGLERFORENINGEN. Information Post MiFID – How far are we? Niki Beattie Managing Director, The Market Structure Practice. AGENDA. Start at the beginning – how did we get here? The impact of MiFID on pre and post trade information
Information Post MiFID – How far are we?
Managing Director, The Market Structure Practice
Start at the beginning – how did we get here?
The impact of MiFID on pre and post trade information
The cost of market fragmentation
What do we mean by a consolidated tape?
Do we need one or can we manage without?
What are the barriers to consolidating data without regulation?
Is regulation likely and if not what happens?
The impact of further data consolidation on the market
Trading on domestic Exchange mandatory in some European countries and domestic Exchange owned and transmitted 100% of the data set
Off Exchange Trading allowed in some countries but differing rules
e.g. UK – mandatory reporting to the Exchange
Exchange owned 100% of the on and off exchange data set and sold it to consumers
e.g. Germany – no mandatory reporting of trades
Approximately 50% of trades by value went unreported to the market
On Exchange trading monopoly broken by introduction of competition
Off Exchange trading allowed by must be reported to a venue of choice – new reporting venues such as BOAT and Reuters
Best Execution Policy established with very broad parameters
market share is
transfers to new
SIX Europe 3.23%
Source: Reuters Sept 2009
Redistribution of profits
The US has a consolidated Tape - in fact 3 consolidated tapes : A, B, C
Clear best execution rules and a trade through rule exist
Consolidated Tape association established in 1970’s (pre demutualization) to disseminate real time trade and quote information world wide
Exchanges act as Administrators
Tape A for NYSE listed stocks – Administrator NYSE
Tape B for AMEX listed Stocks – Administrator AMEX
Tape C for NASDAQ listed stocks – Administrator NASDAQ
Contribution made by each platform
Calculates the NBBO
Onward distribution globally
Do we need a Consolidated Tape? implicit costs
Consolidated data for BP on 17 Nov 2008 14:51:52