Will MIFID II Drive Business Away from Europe?

Markets in Financial Instruments Directive, or MIFID II, have been a work in progress for a while now; companies are spending millions upon millions of pounds to make sure they are ready to facilitate the upcoming reporting changes. Full transparency is the goal and a very welcome one for most, but these increased burdens are set to affect a number of areas outside of firms too. Introducing Brokers (IB’s) are one group that could be highly concerned based on the following.

IB’s have thrived by having a wide range of brokers and products to choose from in the UK and Europe, while boasting some of the most highly regarded trading platforms and efficient trading executions in the world. Therefore it is not a surprise that those looking to introduce business to these firms expect the highest standards for their clients. Unfortunately, these standards are set to be tested with a heavier workload demanded by MIFID II’s intense reporting requirements, and this could decrease the efficiency of current settlement and operation teams. Regulators may also require IB’s to prove their “added value” in order to retain their commission splits and there are a host of knock on effects that remain to be seen here.

Interested in becoming an IB

This is concerning news for some IB’s who may be forced to review their current offerings and potentially set up new partnerships with those providers that will not be affected by the introduction of MIFID II.

At this point, Tradeview becomes an even more viable option as it strengthens its foothold in the UK and Europe.

Tradeview, which is regulated outside of Europe, is able to offer the same products accompanied by world leading efficiencies without the uncertainty that MIFID II may create. IB’s will not lose revenue on the removal of current deals for managed accounts and they will still be able to receive commission splits rather than be forced to take merely an introducer fee for their trouble. One article, posted last month, was even quoted as saying that in the UK and Europe, “the IB revenue model in 2018 post MIFID is over”.

Interested in becoming an IB? Or if you are an IB whose business may be affected by the imminent introduction of MIFID II then feel free to contact me directly at asaward@tvmarkets.com. For more information on how to be an IB with Tradeview take a look at our website at www.tradeviewforex.com.

Adam Saward

 

Adam Saward
Head of UK Business Development
asaward@tvmarkets.com