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Hi Liz

I have to say too many BLOGS are a waste of time with nothing really to say other than boost the ego of the BLOGGER. Quips are fine on occasions but the ammount of rubish posted against quality ideas or thoughts is just staggering. There should be more quality control on BLOGS by the publishers

Geoff

You raise an issue that might be impossible to solve completely. OTC by definition are bespoke transactions created to specific requirements of the issuer and their client. This bespoke nature causes non standard componants.

Its very unlikely that the buy side will have the motivation to invest in technology to build any automated solution as the transactions tend to be on a one on one basis. The nature of OTC derivertives causes them to be automatically highlighted against bog standard vanilla transactions and they are normally subject to far greater scrutiny by managment.

I understand your sentiment to bring automation but feel it is bridge too far, way over the horizon to be seen.

Thank you Juan for your addition

Yes i agree that the ECN in the USA changed the structure but the point is that the traditional Exchanges stil flourish. It probably says more about the ability of ECNs to attract more business into the market and drive down costs and bring change.

I think the European market is much more complex and difficult to change. Even MiFID will take time in bringing the changes it promisses. So you need to have good lungs to see the changes likely.

I suspect that the European markets are going to take a different course to the USA and i hope and expect it to be succesful in attracting global investors away from other markets

Watch out for more consolidation of traditional Stock Exchanges as the ECNs bring greater threat !

Well said Tony and could not agree more! I would add that my views in my recent BLOG concerning Board taking responsibility and understanding the process is as relevant. Hopefully each disaster will teach people more about how badly things can go wrong with lose and ineffectual management 

Not sure where your coming from Dan but totally agree about the problems of finding the real price. Transparancy has been clouded by MiFID to some extent that is a strange result from a directive offering so much oportunty.

I do think that time will settle the market and plenty of new venues will go as fast as they came

Hi Bob

I think that further directives will probably not be MiFID. MiFID was implemented in November and I dont see the point of keep having to refer back. Surely ammendments will come through local regulation that has already been prepared by MiFID. Any future changes will likely require new directives rather than to ammend those already implemented. Otherwise we will be stuck for years debating and over engineering something which has long been implemented.

The flexibility built into MiFID has caused all the various EU markets to engage in ongoing fine tuneing that becomes more difficult as we go along.

So my view is lets draw a line, see where we are in the light of implementation and move on. If that requires new directives than so be it!

I think this BLOG has raised many real issues which shows the market difficulties quite well. 

You make some very good points

I was using the US, as this is the nearest we have to measure the changes happening in Europe. It is unprecedented and we are poking around in the dark a little.

The CSDs are less vertically linked than you suggest and if anything the horizontal structure in Europe of Clearing and settlement provides the Stock Exchanges with plenty of threat. However, at the end of the day the securities business takes an age to move, as most FS firms are tied by legacy thinking, more than by saving a few pence off the price of execution.

MiFID has gone and we have to concentrate on building on the foundations that have been put in place. We can anticipate more directives in the future to fine tune, but in the meantime can we all just let MiFID go! 

Hey Bob

On the button again!

The Clearing and settlement aspects of Best Execution will be huge and I hope FS firms are benchmarking their prices and capabilities already. They are going to have to look very closely at the bottom line and I believe that will cause a reappraisal of costs. As you say the outsourcing solution becomes a very attractive option.

The outsourcing of executions is clearly going to become more and more attractive as the risks of missing Best Execution becomes greater and eventually regulations catch up.

I believe that there are already very good technical solutions on the way that will certainly capture tier two and three FS firms to solve their best execution agreements. It will be very interesting if tier one eventually see the execution capability as a standard and move their services more towards bespoke and value added. With the number of new venues hitting the market (Although more will fail than succeed in my view) the attraction to outsource might become overwhelming.

Hi Bob

I thought this would draw you into a comment! Of course your spot on and we must all keep our eye on whats  actually going on rather than debate MiFID. Whats happening as a result is extremely interesting and i think very hard to call the winners and losers.

I do know there will be winners and losers

The Best Execution retrench back to Brussels gives a very clear indication that what happens next will determin where the market goes and who will be best placed?

The FSA in the UK but regulators more widely in Europe will have to be a little more on the ball to ensure they are performing their responsibilitys and FS firms will have to be more careful about the future direction as they are unlikely to get much lead from their regulator.

This MiFID aftermath demands FS firms think on their feet and act fast. The flexibility inbuilt within MiFID is now being shown and i beleive the game is now well underway. MiFID has now been done to death and beggining to become a industry bore. Many people eyes glaze over once MiFID is included and this is detracting from the real issues that people should have in their sights. A bit like STP after the marketing people had over played the term! So i would like to see MiFID consighned to a historicle fact and concentrate on the exciting new order now being created.

Hi Chris

Yes, I agree we are saying similar things but in different ways. I don't think I used the terms Dinosaur or Dodo but I did make the point that it had already been absorbed within the FS community and it is therefore pointless debating endlessly causes where effects are the important thing.

The landscape has now been created by MiFID and the issue is to build on top not keep harping on about things that have now passed by.

We do not know what the eventual picture will look like! Who will win? Market, Financial Centre, Financial Services Supplier, Stock Exchanges and so on. As with the numbers of new venues. Logic says not all can win and gain the most. History says the survival of the fittest will be a strong factor.

How much business is required to maintain liquidity at any trading venue? Are there enough orders to go round? Will the current economic problems blighting the markets, cause a shift in investments away from securities?

All these are issues that we should be concerned with and not MiFID. MiFID was implemented in November so lets consign it to history and work on the aftermath. I for one am pretty excited about the future despite the current turbulant waters, we have to steer through. Great to chat about this though and thanks for your comments, giving me a chance to reply