Number of banks per RFQ jumps in EU, posing risk to prices

Some requests for quote are sent to over 20 dealers, raising worries about information leakage

Risk to prices

Dealers fielding buy-side requests for quotes on swap trades are facing sharply increased competition from other banks, due to a recent clarification from European regulators. And the impact on prices may be the opposite of what regulators intended.

A March 28 Q&A on the second Markets in Financial Instruments Directive (Mifid II) says a trading venue should not impose limits on the number of participants that a firm can request a quote from. That number has since soared, with two swap traders

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