Some of you know that I’ve spent a while looking at MiFID. In fact, I’m so sad that I even produced a book about it … there you go.
some might think I’d know a little about the subject, although not
nearly as much as my friends in the MiFID Community on the buy and sell
side who enjoy sharing ideas with me, even if they don’t want to
publicly state those ideas.
They’re all up in arms now though
after the rip-roaring mirth created over the latest gaff from an
analyst who hasn’t spent enough time understanding the market or,
conversely, just doesn’t understand the market.
The firm in
question is Gartner, who I have to say I respect for their Magic
Quadrants and numbers for hardware sales forecasts but, when it comes
to vertical market analysis, some might say they are vertically
Here’s an example: Gartner says MiFID will only be a small IT update for most UK firms, a report from Friday’s Computer Weekly.
"For the majority it (MiFID) is a small update to what they have in place and some can be outsourced."
These are the words of one Peter Redshaw, research director at Gartner.
Now, I know that Europe’s largest market making firms have spent over €100 million each this year on MiFID, so that’s what Gartner call a small update?
He goes on to say things like:
"In the UK, businesses are probably doing ok because the UK already has a lot of MiFID requirements as de-facto."
So that’s why the European Commission,
the FSA, the Treasury, and various groups from MiFID-Connect to the
Joint Working Group have spent three years collaborating to produce
ranges of consultation papers and new regulatory advice, with massive
changes to operations, processes and systems for all buy and sell side
"Features of MiFID that Redshaw
said the UK is already prepeared for include best execution when a
customer must be given the best deal available. ‘Companies are already
used to searching for the best price,’ said Redshaw."
So that’s why CESR, the FSA, AMF, BaFIN and the rest have been arguing about how to define best execution and we still don’t have a clear answer.
No wonder my friends are laughing.
First comment from a leading expert I know on MiFID and one of London’s leading MiFID advisors:
so you are aware of the rubbish being heaped upon the unwashed at the
moment … I translate this as: ‘We can’t figure it out and don’t care
what the industry that spends the most money on the face of the planet
on technology think’."
Second comment from one of the leading
thinkers around MiFID and a man who has capital markets flowing through
his blood and veins:
"This is too vertical and granular for Gartner, hence if they don’t understand it, they sandbag."
guess for an industry that is spending millions on a Directive that
they didn’t ask for, which has great ambiguities, stepping into the
fray with an unguarded comment goes down pretty badly.
just stick with saying that: "Best Execution has the clarity required
to ensure that no firm will be confused by what it means" …
… why are those men in the white coats coming into the office?