John casts a weary eye over some of the week’s news stories.
There’s no other place to start than with MiFID II, a phrase I’ll probably be using for some time as we all adjust to ESMA’s new landscape.
One week in and things are going about as smoothly as you could expect when considering the sheer magnitude and reach of the new rules; after all, you don’t spend the better part of a decade working to overhaul an industry this complex, and often resistant to even the smallest change, and expect everything to run like clockwork from day one.
And so there have been the inevitable “teething problems”, another phrase I’m sure we’ll hear more than a few times over the next few months until it becomes a well-worn excuse that no-one is willing to buy, especially the NCAs.
So far a number of exchanges have been granted temporary exemption from the Open Access ruling, with more still awaiting confirmation from ESMA of a stay of execution, but it was the delay of the dark pool double volume caps (DVC) that really stole the show this week.
ESMA cited a lack of sufficient data coming from trading venues — just 2% from three-quarters of trading venues and the majority of files did not cover the required 12-month period from January to December 2017 — as its reasoning for pushing the introduction of the caps back until March.
In my time covering this industry I have yet to hear a single person not working for an NCA that was willing to admit to being in favour of this particular ruling, with ire focused on the somewhat arbitrary levels the caps have been set at. So it’s not particularly surprising to find that there’s industry pushback on this issue and I expect the debate around the role of dark trading to continue well into the future.
Elsewhere we’ve seen the first major industry move of 2018, as Royal London AM appointed Cathy Gibson as its head of dealing, a role specifically created as part of its strategy of a centralised trading desk.
Gibson left her previous role as head of fixed-income with Deutsche Asset Management in December last year, as the investment division of Deutsche Bank gears up for relocation to Frankfurt in the run-up to Brexit.
Whether that factored into Gibson’s decision to seek out a new opportunity is pure speculation, but it will be interesting to see which desk heads opt to stay in London as clarity around how the UK’s departure from the EU is still nowhere to be found.
Blockchain news now and if you’re weren’t already sick to the back teeth of something that doesn’t even exist in the live markets by now, chances are you’ll get to that point soon.
With analysts, consultants and random guys on the street (possibly named Carl) all throwing their proverbial bets down on 2018 being the year we finally see gold dust and pixie dreams, sorry, blockchain technology projects going live, before that happens we’ll be seeing more announcements of successful tests, such as BNP Paribas Asset Management’s end-to-end fund transaction test using the fabled blockchain.
Of course the race to be the first to demonstrate that the “solution without a problem” has finally found a problem worth solving in the capital markets – because there are plenty of good use-cases available in other sectors already – has been in full swing for some time, so as we near this particular finish line my general ennui with the whole affair may finally dissipate. Maybe.