Mifid II cost disclosures pose risk to liquidity, warn banks

Dealers hope standardised methodology for some clients could mitigate impact

Dealers fear having to disclose costs on a trade-by-trade basis prior to execution will increase latency

Dealers have warned that Europe’s incoming cost disclosure requirements for over-the-counter derivatives trades will significantly increase trade latency and impact market liquidity for plain vanilla instruments. Banks are hoping regulators bless a standardised, grid-based methodology for trades with professional clients, which they say may help ease the burden.

The revised Markets in Financial Instruments Directive (Mifid II), which comes into force on January 3, 2018, requires banks to

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: