MiFID II is an upgraded version of MiFID, which increases the protection for investors and makes the supervision stricter. In addition, FCA announced last month that it was prepared to reduce the leverage of traders to 1:50, and the future international regulatory market will definitely usher in a storm.
At present, some large foreign exchange dealers are planning ahead. For example, Jiasheng Group recently decided to launch a brand-new Jiasheng global market service supervised by the British Cayman Islands Monetary Authority (CIMA) on the basis of the existing Jiasheng UK service supervised by FCA, which is also an important measure for Jiasheng to cope with future market changes.
One of the main goals of MiFID II will be to support the transparency of derivatives and futures markets, and many new elements will be added to reports and disclosures, such as research expenditure.
The regulation is intended to help improve relevant measures, but Jeff Patterson of Prime Brokerage believes that it is not clear how the industry will react to this new system and what consequences the new measures will have in terms of expenditure, personnel and transaction volume.
Although the start of any brand-new supervision system may cause short-term turmoil and adjustment period, it can be considered reasonable. However, the most direct impact will be the research expenditure and consumption of banks.
Patterson believes that the new rules may eventually lead to the disappearance of thousands of jobs in this industry.