One year on from the entry into force of Europe’s Markets in Financial Instruments Directive (Mifid II), the deleterious impact on equity research is now clearly apparent.
Mifid II’s squeeze on brokers’ revenues is industry-wide. Individual firms will always argue it is hurting rivals more, but it is clear that smaller houses specializing in stocks with a small and medium-sized market capitalization are suffering most.
“We are seeing the early signs of anxiety about coverage, liquidity provision, access to capital markets,” says David Mortlock, head of investment banking at Berenberg, one of Europe’s biggest and fastest-growing mid-cap equities houses.
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