Mifid II to cause shake-out in hedge fund derivatives trading

New requirements may lead to consolidation among small funds

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Mifid II will affect how hedge funds trade derivatives

Experts say the Markets in Financial Instruments Directive II (Mifid II) will push up the cost of hedge funds doing business and may call into question the efficacy of some derivatives trading strategies, leading to consolidation among firms.

In December 2014, the European Securities and Markets Authority (Esma) published final technical advice for delegated acts and a consultation paper on Mifid II, which is due to come into effect on January 3, 2017.

Mifid II will introduce a level of uncertaint