Systematic internaliser loophole ties Mifid in knots

Banks warn attempts to limit connections between SIs could undermine best execution

With preparations for the European Union’s vast new financial markets rules now well into their final year, regulators are still facing some fairly fundamental questions. The latest conflict brewing relates to connections between entities engaged in large volumes of bilateral trading. Lawmakers now want to limit such connections, but banks warn this could undermine another key element of the same package of rules – namely, best execution requirements.

Under the second Markets in Financial Instr