The MiFID II waiting game

We are now well into October and market participants are still waiting patiently for ESMA to provide details of instrument data for MiFID II. The industry is keen to consume important data to drive functionality and trading strategies; basics such as which instruments are in scope, which are classed as liquid, what is large in scale and where the equity dark volume caps will fall. The download interface mechanisms also remain a mystery. ESMA did publish some project documents this week related to the financial instruments reference data system (FIRDS) so hopefully more is coming soon.

Amidst the somewhat eye-watering costs to create this centralised number-cruncher, it was interesting to see the regulator’s estimates around how many OTFs and SIs are expected to materialise. Under MiFID I it says there are around 230 regulated markets and MTFs submitting reference data today. On top of that, for sizing purposes, working estimates are based on up to 60 new OTFs/SIs by January – a potentially significant impact on the liquidity landscape going into 2018.