This position paper looks at the changes that have been effected in the European capital markets more than one year after the implementation of MiFID (Markets in Financial Instruments Directive). These changes are hard to quantify, but initial fears of the rise of so-called dark pools of liquidity have proven well founded. In addition, the best execution obligation remains ambiguous. The paper examines other features of the post-MiFID trade execution landscape and recommends that post-trade reporting be standardised, that a single measure of execution quality be adopted, and that the debate on regulating transactions in less liquid asset classes and giant OTC derivatives markets be re-opened. We would like to take the opportunity to thank the three sponsors of the EDHEC "MiFID and Best Execution" Research Chair, sponsors that have been supporting EDHEC work over the last year: CACEIS, NYSE Euronext and SunGard.
The work presented herein is a detailed summary of academic research conducted by EDHEC. The opinions expressed are these of the author. EDHEC Business School declines all reponsibility for any errors or omissions.