European Trading Houses Are Challeged with Regulatory Burden

European Trading Houses Are Challeged with Regulatory Burden
30.05.2017 11:30 am

European Trading Houses Are Challeged with Regulatory Burden

Regulatory Standards

Regulation is overwhelmingly the biggest hurdle traders face, according to a major survey of equity, bond and other product traders in the UK and Europe conducted by SIX Swiss Exchange. 

An overwhelming 65% of respondents believed increasing regulation, such as MiFID II and FinfraG, would have the biggest impact on their business.

It is however evident, that traders do not believe their current or future block trades will be effected by the increase in regulation. Of those surveyed, 44% said recent regulatory changes would not push them to trade in larger block sizes - a significant amount compared to the 8% that said it would and compared with the 35% who were undecided.

Traders seem to be taking advantage of the lack of a volume cap ahead of MiFID II’s implementation with 17% trading more actively and increasing the interaction with block sized liquidity. Ahead of the introduction of volume caps in MiFID II, over a third of respondents were undecided on whether the changes will affect the way they trade. An equal number of respondents expected no change to their trading behaviour.

Despite this uncertainty, traders remained confident with regards to growth in the block trading sector, with 18% of respondents expecting the greater than 50% growth in the market and a further 30% of respondents expecting growth between 0-50%. Only 9% of respondents expected a decline in growth, with the remaining 43% of respondents expecting the market to remain stable.

When asked if the UK was more accepting of non-display pool trading than other countries, and therefore the best market place for it, 15% thought that this was the case and 45% stated it was too early to tell.

There are also evidently concerns surrounding key macro level themes. A significant 15% of respondents felt that rising interest rates would have the biggest impact on their firm, whilst Brexit, the global influence of the Chinese economy and competition made up 20% of future concerns to traders. This is very much echoed in the 52% of respondents who predicted their companies would begin to shrink their workforce over the next three years, with only 15% expecting workforces to grow.

Related News

AML, KYC and Sanctions Fines for Global Financial Institutions Reach $5.6 Billion Mid-Year

Fenergo, the leading provider of digital transformation, customer journey and client lifecycle... Read more »

Lanistar chooses W2 to power its new banking alternative

W2 partners with Lanistar, ahead of its polymorphic debit card launch that will revolutionise how customers manage their money. W2, the... Read more »

Huobi Tech’s (1611.HK) Asset Management Subsidiary obtained SFC Type 4 and Type 9 licenses

Huobi Asset Management (Hong Kong) Limited (the “Company”), the wholly-owned asset management subsidiary of Huobi Technology Holdings Limited (1611.HK), is... Read more »

Finch Global launches fintech digital passport to make compliance checks smoother for businesses

As financial institutions and organisations come to terms with the challenges of the post-Covid-19 world it is obvious that regulated businesses urgently need a new, more... Read more »

Ardent Financial selects SteelEye for MiFID II and MAR compliance

SteelEye, the compliance technology and data analytics firm, has been selected by Ardent Financial, a new FCA authorised Securities Dealer, to... Read more »

EQ launches new automated complaints product for the financial services industry

EQ (Equiniti), the international technology-led services and payments specialist, is delighted to announce that it is launching a new automated complaints... Read more »

Magazine
ALL
Free Newsletter Sign-up
+44 (0) 208 819 32 53 +44 (0) 173 261 71 47
Download Our Mobile App
Financial It Youtube channel