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The MiFID is dead, long live the ... ELF?

Okay, so you are probably reading this blog because of the title, so I had best explain what it is all about. In the olden days - so I understand - when the UK Monarch died, a courtier used to announce the "King is dead, long live the King". Presumably this was both to signal the passing of an era, as well as to express continuity of the Royal line. So what has this got to do with MiFID then? It is my belief that despite not all tasks being complete in all geographies (see Chris Skinner's most recent MiFID blog for details), now that we have passed the November "deadline" we are at a significant milestone or turning point.

Well, why not "MiFID is dead, long live MiFID" then? Well just like the names of some kings acquire a reputation or stigma - take King John for example, not a popular name for kings since ... probably just as well, I would make a lousy king ... wouldn't find a crown that would fit etc, etc ... so MiFID has acquired the tag in many peoples minds as a painful repapering and compliance exercise that should be firmly finished as soon as possible. The same type of process happened with the term STP some years ago - but this didn't mean that people stopped improving their end to end securities processes.

So as I complete a major MiFID programme in the UK, tie up the loose ends and talk to clients in the Equity markets about their business priorities, these are expressed not in terms of continued MiFID activities but instead how they can proactively take advantage of the market changes, facilitated by MiFID. The prime amongst these is European Liquidity Fragmentation - the ELF in the title - and the impact of Chi-X and Boat and the potential for Turquoise, Smartpool, Euro Millennium, Equiduct ... They are less worried about late transposition and adoption across all the EEA, and believe that challenging best execution will be - for now at least - a minority sport.

Hence the goofy title, as my small contribution to trying to move the debate from an obsession with paperwork, regulation and compliance to the challenges of a rapidly evolving market. So do you agree that 2008 will be the year of the ELF? Comments please...



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