MiFID II and EMIL: The impact of regulation on securities operations in European markets

Abstract

Market reviews and consultations have already begun in order to introduce appropriate post-MiFID ‘tuning measures’ across EU financial markets, and these, combined with European Market Infrastructure Legislation (EMIL) that is under consideration for the post-trade sector, will alter the shape of financial markets in Europe. As well as presenting new and additional responsibilities that will change securities operations, they are also expected to create new commercial opportunities for financial institutions and service providers. Financial institutions are stating more frequently that, in reality, change will only occur as a result of regulation, and buy-side firms are surprising themselves by proposing the need for a regulatory approach to industry change. The operational changes that will result from these regulatory changes will require different service and IT infrastructures to those that many financial institutions rely on today. Market transparency and reference data, European Best Bid and Offer prices, de-risking trading and the increased use of CCP services are major practical topics for securities operations professionals for the coming years. Changing processes will need changes to the IT strategies of financial institutions, particularly as technology itself is changing in parallel.