Mifid is likely to have proved a bonanza for technology companies – not quite the bonanza some expected, perhaps, but a decent boon all the same.
Mifid’s definition of best execution means financial institutions should offer speed, cost and certainty of trade execution as well as price.
However, almost every national stock exchange, clearing house and bank has its own proprietary applications. It is a fact which has made it difficult for other providers of clearing and settlement services to compete.
But the directive sets out a number of measures designed to break down barriers to entry.
“It appears that the Financial Information eXchange (FIX) protocol is set to become the prevailing standard for pre- and immediate post-trade data, and that common carrier networks will win through,” said Alan Jenkins, a consultant at BearingPoint, the technology consultancy.
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