Transparency rules top MiFID II concerns for investors

Transparency rules are a top concern for firms, especially hedge funds.

Pre- and post-trade transparency rules in MiFID II are the biggest concern among institutional investors, according to research from State Street.

A poll of 100 global asset managers and alternative asset managers found 73% of firms are most concerned about the challenge of implementing MiFID II.

Rules around transparency for in-scope instruments were the single biggest issue facing the industry, with 59% of firms citing them as having a major impact on their firm, climbing to 77% among hedge funds.

Kim Newell-Chebator, EMEA head of Global Markets at State Street said: “The level of reporting required is a significant data undertaking; and tools that facilitate this are of increasing interest to our clients. MiFID II also supports a shift to electronic platforms. Whilst a welcome move for modern day trading, venues will need to ensure they have effective safeguards and systems in place to ensure they remain compliant and controlled.”

Despite implementation being over a year away, 78% of firms surveyed said they are increasing the amount of time they spend discussing regulation with senior management and boards. Firms are also looking for increased guidance, with 76% saying they believe education on how to deal with MiFID II would be helpful to them, while 60% are looking at using better data and analytical tools to help them deal with regulatory impact.