BUY SIDE

Third of buy-side to adjust broker lists ahead of MiFID II

Survey carried out by Liquidnet has found more than two thirds of asset managers are currently reviewing new liquidity providers.

By Hayley McDowell hayley.mcdowell@strategic-i.com September 05, 2017 9:04 AM GMT

New research has revealed a third of asset managers plan to adjust their broker lists prior to MiFID II’s January deadline.

A survey of firms carried out by Liquidnet found 70% are also currently reviewing new liquidity providers outside of their traditional broker relationships.

When choosing new brokers, access to liquidity was highlighted as the number one requirement for 69% of buy-siders, although how firms’ access liquidity is expected to open up due to unbundling rules under MiFID II.

Liquidnet also found that with just four months until MiFID II is due to be implemented, just 6% of those surveyed believe they are currently ready to meet best execution requirements.

The survey suggests asset managers have room to improve their best execution policies, with 61% recognising the need to provide more granular detail to their policies.

A third of buy-side firms are also planning to make changes to trading workflow and over a quarter will invest in technology to ensure a more systematic approach to best execution.

Rebecca Healey, head of EMEA market structure at Liquidnet, explained asset managers have hit the reset button to ensure they meet the high regulatory standards required.

“Best execution no longer means a mere ‘look back and check’ on the outcome of an individual order,” she added.

“It is now the creation and implementation of a process that enables the trader to be in possession of as much valuable information as possible, throughout the lifecycle of a trade.”