Closing conditions: Mifid II special

Author: | Published: 11 Dec 2017
Email a friend

Please enter a maximum of 5 recipients. Use ; to separate more than one email address.

You’re hired

As if further evidence was needed that Mifid II will break records in terms of compliance costs for financial institutions, the number of job adverts on LinkedIn for Mifid-related positions has grown more than 400% in the past year. Even Brexit has not had any chilling effect on Mifid II-driven hiring, unlike in most other sectors.

According to data compiled for the Financial Times, there were 1,300 jobs related to Mifid II at the end of October advertised on Linkedin, one-third of which are located in the UK. Mifid II related hiring has indeed grown significantly in the past year or so as pretty much everyone in the EU financial sector prepares for the dreaded January 3 2018 deadline. Reports point out that two areas in particular are driving recruitment: product governance and investor protection specialists.

That being said, one area where the Mifid II Midas touch is likely to trigger job losses is the investment research space. New unbundling rules are widely expected to cause asset managers to put the brakes on the research they chose to carry out.

Winner takes all

Mifid II has pretty much everyone everywhere in Europe scrambling to comply, but some more than others. With this in mind, Bloomberg has devised a scorecard outlining the types of firms likely to benefit more than others from the sweeping changes the legislation introduces.

It lists pension funds, big investment banks, exchange traded funds and non-EU exchanges as some of the firms the most likely to win at Mifid II. Why? It's all down to money, and the ability of the larger organisations to compete on price and manipulate research fees accordingly. For non-EU exchanges, it's their geographical location that plays on their favour, though Mifid II's extraterritorial effects are well publicised.

On the other end of the spectrum, the smaller money managers, hedge funds, SMEs and boutique investment banks will likely lose out for the exact same reason as before: cash. The smaller organisations have less budget to spend on research and/or publicity, and will likely be the victims of a price war waged in the aftermath of Mifid II's coming into effect, on January 3.

November in numbers

1.4 million number of paragraphs of rules contained in Mifid II

100 microseconds: timestamps for high frequency trading must be accurate within this timeframe to comply with Mifid II

€10.3m average amount the top tier firms will spend on Mifid II compliance

€2.5 bn estimated cost of compliance with Mifid II for the EU financial sector (at least)

50% of all asset managers don’t know how they will pay for research once the new rules kick in

78% of all assets managers plan to use less research from large investments banks once the rules take effect, instead sourcing

65 data fields that must be filled on when a transaction is reported under the directive

$250,000 price of all-in research at a number of the world’s largest banks, down from $4 million before the mandatory unbundling under the Mifid II framework

23% percentage of US buy-side market participants who are confident they have a plan in place to deal with Mifid II

688,346 legal entity identifiers issued since 2012, with roughly 100,000 new ones issued in October 2017 alone, more than at any time in the past five years

Coming up next

IFLR European In-house Counsel Summit

The annual event is returning to London’s Waldorf Hilton on January 26, bringing together lawyers from banks, corporates and private practice

IFLR Asia M&A Forum 2017

Join us in Hong Kong on March 1-2 for this two-day must-attend event for M&A practitioners in the region

IFLR Asia awards shortlist

Submissions for the best deals, teams and firms of 2016 have now closed. The shortlist will be announced on January 6, with the ceremony to follow on March 2. Keep an eye on iflr.com

 


 

 

close Register today to read IFLR's global coverage

Get unlimited access to IFLR.com for 7 days*, including the latest regulatory developments in the global financial sector, updated daily.

  • Deal Analysis
  • Expert Opinion
  • Best Practice

register

*all IFLR's global coverage published in the last 3 months.

Read IFLR's global coverage whenever and wherever you want for 7 days with IFLR mobile app for iPad and iPhone

"The format of the Review has changed over the years; the high quality of its substantive content has not."
Lee C Buchheit, Cleary Gottlieb

register