Understanding the global impact of MiFID II and Best Execution
Vice President of Business Development in Australia and New Zealand, Dan Enstedt, recently spoke to Wietske Jarvis-Bleese from Thomson Reuters, in a discussion on MiFID II and Best Execution. As the implementation date of January 3 2018 nears, it is becoming increasingly important to understand the impact of MiFID II on not only European markets, but Asia and the Pacific regions.
Read an excerpt of the report below:
Under MiFID II, however, best execution is about more than price, so relying on TCA alone is not sufficient.
Dan Enstedt, vice president, business development at FlexTrade in Sydney, said MiFID II had shifted the focus of best execution implementation away from price toward the process of deciding on best execution as a whole. “In the past, best execution was all about the outcome and the final execution price. Under MiFID II, it is about the process as a whole, how do you perform best execution and how do you ensure you meet the requirements,” Enstedt said.
He said while TCA was a natural first answer to best execution in the liquid markets, best execution under MiFID II was about more than price and transaction costs.
“There are all these other factors that you have to take into consideration and that are not typically included in a standard TCA report. Similarly, simply taking the results from an algo wheel to a regulator does not qualify as a best execution policy; it helps you make a more informed selection but it is only one component of the overall best execution process,” Enstedt said.
You can download the full report here.