Mifid II rules are 'rippling' around the globe

The president and chief executive of Canadian trading firm Select Vantage told the FTAdviser Podcast that Mifid II influenced what happened in North America because Europe was a "massive part" of the global trading industry.

He said: "What happens in North America is people do not want to maintain two sets of infrastructures and two sets of plans so they are trying to see what will apply in the US, what will not apply in the US, what will apply in Canada.

"These are all global businesses now so if the participants that operate in Europe have to make significant changes and they don’t want to have two sets of systems and two sets of policies and procedures, they may pressure US regulators to give them some kind of exemptions or to make the rules more in line in certain processes."

Mifid II, which came into effect in January 2018, includes rules which mean banks and brokers must charge asset managers specifically for investment research, which would previously often be bundled in with the fees they charged for carrying out trades.

This has led some fund managers to cut back on the research they received and put pressure on some brokers.

Mr Schlaepfer said many brokers in North America were reporting higher cost bases and lower revenues because of the uncertainties caused by Mifid II.

He said: "We have a direct cost in terms of the research and the effort we have to put in to make sure we are following the rules and doing everything properly. The bigger concern I have is that our brokers have a significant cost to adapt to the new rules, they spend a lot of time going through them, trying to figure them out, understand them."

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damian.fantato@ft.com