EU prop firm capital crunch could hit market liquidity

Traders claim they would be put out of business by bank-style capital rules

Proprietary trading firms claim they will be put out of business if they become subject to bank-style regulatory capital rules in Europe from the start of January 2018 – a prospect that is also worrying some large exchanges, where non-bank traders are important liquidity providers.

In theory, there is a way out. All investment firms that come under the scope of the second Markets in Financial Instruments Directive (Mifid II) when it enters into force next year would also be subject to the

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