Regulation: The challenge of Mifid
The European Commission’s Markets in Financial Instruments Directive is due for final implementation from November. Many participants in the foreign exchange market still seem to be labouring under the misapprehension that Mifid will not have any impact on them, because the EU’s prime intention is to protect retail equity investors. Furthermore, the FX market is relatively confident that it is already delivering excellent execution (see Does FX need best-execution regulations? Euromoney May 2006).
Phil Weisberg, chief executive of Fxall, wrote in a recent booklet entitled Best practice in foreign exchange markets that he saw "Mifid as one of the key challenges and indeed opportunities that is front of mind for the industry. For many participants there remains uncertainty over precise details of the directive’s implementation while others see an opportunity for a more level playing field. Best execution has been on our industry’s agenda for some time and in many ways Mifid is helping to apply consistency and clarity for our clients."
Laetitia Visconti, a business analyst and Mifid expert at independent software vendor GL Trade in Paris, feels that there is no doubt that some FX players will be caught unprepared when Mifid is implemented.