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Five years’ of providing a voice to the EU principal trading industry
This summer, FIA EPTA marked the 5th anniversary of its foundation. Although still a comparatively young organisation, this milestone has caused the people, like myself, who were there at the start to reflect upon how things have changed since we’ve been in business – as well as looking forward to what the next five years might bring.
CONTINUE READINGCRD IV bonus cap has perverse effect of increasing risk
The EU's Capital Requirements Directive CRD IV has imposed a bonus cap on credit institutions and investment firms with the intention of discouraging the excessive risk-taking with client monies that contributed to the financial crisis. However, the inappropriate application of this bonus cap to principal trading firms now has the potential to result in the perverse effect of actually increasing risk, whilst hurting market quality.
CONTINUE READINGTag 1031 FAQ
In December 2018 the FIA and FIA Tech published Guidelines for the Simplified FIA Execution Source Code Schema.
CONTINUE READINGUpdated CME Group regulatory guidance on block trades
The CME Group Market Regulation Department is adopting updated guidance in its Market Regulation Advisory Notice (MRAN) concerning the execution of block trades in CME, CBOT, NYMEX, and COMEX products.
CONTINUE READINGLiquidity and Quote Fading
One observation I see made regularly by commentators on electronic markets is that liquidity can 'disappear in an instant' and is somehow ephemeral. Quotes, they say, tend to fade as soon as the market notices there's a seller around. I'm always rather bemused by this observation, because it implies that in more manual markets, liquidity is (or was) more stable.
CONTINUE READINGNon-discriminatory access to MiFID II derivatives trading venues: Critical for market transparency and competition
With the requirement for MTFs and OTFs to have objective participation criteria, MiFID II aims to dismantle existing barriers and increase competition and pre-trade transparency for all market participants. It is worth remembering, however, that despite similar objective participation criteria requirements in the US, additional guidance from regulators was required in order to address certain discriminatory practices.
CONTINUE READINGFinancial Markets 2.0
FIA EPTA's Acting Chairman, Mark Spanbroek, presents a John Lothian MarketsWiki Education series on 'Financial Markets 2.0'.
CONTINUE READINGThe myth of order cancellations: a new study
It is sometimes said that high frequency traders aren’t really providing liquidity to the market because they cancel orders more frequently than other market participants. A new research paper shows that this really isn’t true.
CONTINUE READINGHigh Frequency Trading: What’s the big deal?
This is the question asked by Evangelos Benos, from the Bank of England’s Financial Markets Infrastructure Division, on the Bank’s staff blog (Bank Underground). As well as providing a useful summary of the evolution of HFT, the main focus of the blog is a discussion of the overall impact of HFT on market quality. His conclusion? That while there are “some aspects of HFT activity that are still contentious… the inescapable conclusion that so far emerges is that HFT has mostly had a positive impact on market functioning.”
CONTINUE READINGFurther evidence that new rules could threaten market liquidity in Europe
A preliminary research report by three professors at the Toulouse School of Economics[1] has raised concerns over the impact impending regulations could have on market liquidity.
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