25
May

Mifid should bring down your brokerage fees

Escrito el 25 Mayo 2007 por Juan Toro en Financial Markets

The European regulations known as Mifid (Markets in Financial Instruments Directive) will come into force in November. Mifid has not been discussed much in the financial press, though we will probably hear more and more about it. The main goal is to bring transparency and competition to the European financial markets.


Transparency will come in the form of some of the main requirements of the new regulation in relation to broker/dealers. With Mifif brokers are required to deliver “best execution” . This implies best price as well as fastest fulfillment of an order. Together with this requirement, brokers need to report clear information in pre-trade and post-trade phase. These requirements will obviously increase transparency.

Competition on the other hand will come from the possibility of trading equities in a platform aside from the traditional regulated exchanges. Mifid allows the existence of “systematic internalisers”, whereby customer

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