Insight Innovation Implementation

Latest Publication - Shedding light on dark trading in Europe

Authored by Professor Carole Comerton-Forde, Professor of Finance at the University of Melbourne,  MI3’s maiden publication examines how firms need to adjust to new restrictions on dark trading and the closure of Broker Crossing Networks that will come about during MiFID II’s implementation in January 2018.

 

While the industry will be able to weather several of the changes easily, certain points, such as double volume caps being assessed by the European Securities and Markets Authority, are likely to have more dramatic and adverse effects, with possible suspensions prohibiting dark pool trading at venues if trading volume caps exceed accepted limits.

 

The paper makes four main recommendations:

 

  • Buy side firms will need to assess 2017 trading levels to determine whether volume caps will be reached, possible triggering trading suspensions
  • Buy-side firms will need to collaborate with sell-side on adjusting operating practices when dark trading is shut down in certain stocks
  • Firms will need to carefully evaluate the merits of new trading venues
  • Buy-side firms should look to effectively capitalise on new data provided by MiFID II to assist with the evaluation of trading outcomes.

About Market innovator (MI3)

Integral to Plato Partnership’s vision is academic research – the Market Innovator (MI3). This will produce independent research and analytics, open to peer review, and aimed at seeking out ways in which the Plato community can collaborate to build a better financial ecosystem.

 

Plato Partnership’s members believe that there has long been a desire to have a mechanism whereby all market participants can collectively address regulatory imperatives, communication flows, or other universal processes that are not competitive differentiators. The economics of tackling those individual issues through a preformed collective will enable Plato Partnership to take serious costs out of the system and earn trust. The members believe that Plato Partnership holds a unique position and through its Market Innovator (MI3), will be able to create a flow of truly compelling proposals.

 

Submit your ideas above on areas where we might consider sponsoring research. Or just share your general ideas and feedback on our Market  Innovator (MI3)

“This is an exciting and important initiative that explicitly recognises the need for academic research into these key issues,” he said. “Such research will be significantly enhanced by improved data availability and the implicit links between academic researchers and practitioners that this project envisages.”

CEPR-Imperial-Plato Inaugural Market Innovator (MI3) Conference on the Evolving Market Structure in Europe and Beyond

 

The inaugural Plato Partnership MI3 academic conference, Evolving Market Structure in Europe and Beyond, was held in conjunction with Imperial College London and CEPR, on Thursday 29 June 2017.

 

With over 80 attendees combining a balanced mix of industry practitioners and senior academics from across the globe, the discussions were informative, in-depth and varied. Seven papers, submitted by leading academics in advance of the day, were chosen for discussion by leading industry experts. For exclusive, pre-publication access to these papers, please follow the links below:

Professor Sir John Beddington, head of a wide-ranging UK government-backed 2012 study into the long-term effects of computerised trading on markets:

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