European Trading Under MiFID II: New Survey Finds Buyside Expects More Block Trading and Robust Off-Exchange Liquidity
January 03 2018 - 2:59AM
ITG (NYSE:ITG), a leading independent broker and financial
technology provider, today released a survey of buyside traders
about how Markets in Financial Instruments Directive II (MiFID II)
is likely to impact European trading liquidity in 2018. The
December 2017 survey polled more than 50 buyside institutional
investors who trade European equities.
Survey Findings:
- Block Boost: Block trading volumes more than
doubled in 2017. The majority of traders polled - more than 80% -
expect strong block volume growth in 2018, while fewer than 20%
expect block volume to remain flat or shrink under MiFID II. More
than 86% of traders surveyed expect to interact with block trading
venues in 1Q 2018.
- Off-Exchange Strength: Dark pools and MTF
periodic auctions currently make up almost 10% of total European
trading. By the end of 1Q 2018, most of those surveyed (61%) expect
dark/periodic auction MTF liquidity to grow to 12% or more of total
trading, 23% of traders expect it to remain around current levels
while 16% expect it to shrink to below 8%. Overall, more than 82%
of traders polled plan to interact with dark MTFs in 1Q 2018, while
80% plan to interact with periodic auctions.
- Enter the SIs: Banks and electronic liquidity
providers (ELPs) have registered to establish approximately 100
systematic internalisers (SIs) under MiFID II. Some 88% of traders
surveyed expect that there will be fewer than 10 relevant ELP SIs
in operation at the end of 2018, while 42% expect there will be
fewer than 5. Bank-run SIs look to be the more popular
choice, with two thirds of traders expecting to interact with Bank
SIs in 1Q 2018 versus fewer than 40% for ELP SIs.
- Overall Liquidity: Opinion is split on how
MiFID II will impact traders’ ability to access quality liquidity.
37% of those polled expect it to become harder, 18% say it becomes
easier while the remaining 45% expect no significant
impact.
MiFID II Solutions
MiFID II is the biggest change to European equity market
structure in a generation. ITG is committed to partnering with
clients as they navigate the far-reaching impacts on liquidity,
unbundling, and best-execution requirements. Key offerings include
our POSIT Alert block crossing network, POSIT Auction, our Dark
algorithm, the broker-neutral Dark Allocator and Algo Wheel and
Research Payment Account (RPA) tools. For more about ITG’s full
range of MiFID II-ready execution, liquidity, workflow technology
and analytics solutions please contact info@itg.com or visit
itg.com/mifid-ii.
About ITGInvestment Technology Group (NYSE:ITG)
is a global financial technology company that has pioneered client
self-directed trading algorithms since 1998. ITG helps leading
brokers and asset managers improve returns for investors around the
world. We empower traders to reduce the end-to-end cost of
implementing investments via liquidity, execution, analytics and
workflow technology solutions. ITG has offices in Asia Pacific,
Europe and North America and offers execution services in more than
50 countries. Please visit www.itg.com for more
information.
ITG Media/Investor Contact:
J.T. Farley +1.212.444.6259corpcomm@itg.com
Investment Technology (NYSE:ITG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Investment Technology (NYSE:ITG)
Historical Stock Chart
From Jul 2023 to Jul 2024