K&KGC  -  Key findings from 6th ATF Global Summit 

 

The overall levels of liquidity have remained stable throughout the first month of MiFID II but the buy side have reported a significant increase in electronic trading. Electronic RFQ remains the preferred means of trading liquid bonds and block sizes. The buy side now have more means to trade less liquid bonds through Axes, RFQ and voice. A few electronic venues are starting to distinguish themselves with their strengths. 

Many brokers were unprepared for the Systematic Internaliser regime but thanks to electronic platforms and the new processed trade services, any issues from a trade reporting perspective, were minimised. 

The buy side are disappointed that the highly anticipated benefits of MiFID II from higher levels of transparency are diminished by the deferral regime where only 804 out of ESMA’s 69K ISINs are deemed liquid and will therefore be subject to deferred reporting. 

The buy side reported third party dependencies as the major cause for the regulatory reporting challenges. The majority of buy-side firms in continental Europe have however registered their funds under the UCITS regime already in 2017 so they are not subject to the same reporting obligations.

The buy side are poised to develop their data capabilities in 2018 for better informed decision making. There is going to be a great opportunity for TCA/best execution analytics and low touch auto execution vendors to make a mark among the fixed income buy side traders.  

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The next Alpha Trader Forum fixed income spring 2018 roadshow dates are; 17th May in Frankfurt, and 5th June in London.