Two Too Miffed at Mifid II

Two very large hedge funds in Europe have abandoned their Mifid licenses, according to the FT, because of onerous reporting requirements. According to the FT, “Hedge funds are acutely concerned about the reporting requirements under Mifid, which will involve sending lengthy reports to regulators within minutes of trades being placed, detailing how they were executed.”

The two hedge funds, Tudor and Brevan Howard, are among the largest in the world. They are not abandoning Europe but will instead choose to be regulated under Alternative Investment Fund Manager licenses. This category carries its own burdens, including trade reporting. But it is interesting to see leading firms vote with their feet to escape Mifid II. Will others follow? Have regulators gone too far this time?

Better trade reporting. Disclosure. More transparency for the purposes of aiding liquidity in bonds. DealVector has been in favor of all of these developments. A variety of platforms and vendors have been moving to make compliance with Mifid easier. We shall see in time if they have made it easy enough for investors. Or is it that participants don’t want it to be easy?