In remarkably strong terms, the International Capital Market Association, the International Swaps & Derivatives Association and the Bond Market Association have come together to reject a key element of the Financial Services Authority’s proposals on implementing the EU’s Markets in Financial Instruments Directive (Mifid) best execution requirements. The proposal covers implementation of a benchmarking system. The UK regulator, without any prior consultation with trade bodies, got IBM to come up with a methodology. The idea is that dealers would use a benchmark price in a particular product to which an appropriate spread would be added, thus providing proof to a client of best execution.
Unfortunately this proposal is not...
