ICE boss Sprecher blasts regulators over Mifid II

Sprecher claims reporting and best execution rules in Mifid II is “balkanising” Europe’s securities markets.

Jeff Sprecher, the chief executive officer of Intercontinental Exchange (ICE), took aim at European regulators today, blasting them for “fracturing” financial markets.

The outspoken CEO used the company’s quarterly earnings call as a platform to lambast European regulators over the incoming reporting and best execution rules set out in Mifid II, which he claimed are “balkanising” Europe’s securities markets.

He said: “For many years our industry went electronic and took for granted the fact we could trade globally. Now there are speed bumps around the world… reporting requirements and other things that are fracturing the markets.

“There is a trend in Europe that it [European regulators] is trying to specifically potentially fracture markets with Mifid II. As those markets fracture, the need for putting the information back together… and  having it delivered in a manner that is safe and timely is really where the puck is going to go and that’s where we’re skating.”

He said ICE could benefit from a host of business opportunities as a result, including in fixed income through Interactive Data, the business it acquired last year for $5.2 billion.

ICE’s acquisition of Interactive Data gives it access to new information and price discovery services in Europe’s cash bond market; services which Sprecher claims will become increasingly important after the new regulations come in.

He added: “The buy-side was [previously] able to rely on certain services that came from the global banking industry that was relatively casual and informal. But today due to regulatory reform and internal audit practices [they] need to be more rigorous.

“Asset managers and others are making investments to comply so they are able to represent to the end users that they are using best practices. It is a relatively new market; the fixed income space is evolving… so we think it is early days and a big market.”

Earlier this week, ICE announced AllianceBernstein had selected Interactive Data to help manage its trade execution quality and transaction cost analysis, which is fundamental in Mifid II’s best execution practices.

According to ICE’s full year results, revenues from its consolidated data services hit a record $871 million, up 26% year on year.