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Will Europe Delay MiFID II?

As Europe melts down, the question is will the European Union delay the implementation of the latest version of MiFID? Don't bet on it.

With the newly proposed MiFID II compliance mandate, European lawmakers have issued new rules governing dark pools, derivatives and high-frequency traders. Given the turmoil across the Atlantic -- Greece and Italy on the verge of default -- will the new rules be delayed? In an upcoming Advanced Trading cover story on MiFID II, I asked two industry observers for the chances that the new laws might arrive later than 2013.

Robin Strong
Director of buy side market strategy, Fidessa

Where do we stand with MiFID II? Will the EU delay it as Greece and Italy melt down?

Robin Strong: Laws like this have historically been delayed and the new things in this directive means it is bound to be delayed. If you take the action of MiFID ... it gives a little bit of wiggle room in member states to make some delays. We have the regulation, which is binding, one size fits all. In order to ratify it because of the regulation the member states are subject to it but they have to pose scrutiny for ratification. I think it will be delayed.

Having read the text and seeing the ambiguity of will Europe survive and will the euro survive -- there are more pressing issues.

When will it be ratified? When will MiFID II commence?

Strong: It's very hard to make predictions about dates.

Andrew Stoltmann
Chicago-based Securities Attorney

Will high-speed traders go to other markets where MiFID does not have much of an impact?

Andrew Stoltmann: It's funny because ever since 2008, we've been hearing that American traders are going to go to Europe and now the European traders are saying, "We can't stay here, we can't go to America -- we need to go someplace else."

And good luck. Have at it. Where else are you going to go besides Europe and America? Is it possible? Traders have been using that threat for years and I think it's hollow.

To play Devil's advocate, there are global markets out there, South America and China. They can go there, right?

Stoltmann: Yes, they can but there are real advantages to being where the money is: In the United States and in Europe. Could they go elsewhere? Absolutely but I don't think it's going to happen.

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For more on MiFID II, check out the December 2011 edition of Advanced Trading, which should be posted by November 15, 2011.

Phil Albinus is the former editor-in-chief of Advanced Trading. He has nearly two decades of journalism experience and has been covering financial technology and regulation for nine years. Before joining Advanced Trading, he served as editor of Waters, a monthly trade journal ... View Full Bio

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