The second chapter of the Markets Infrastructure Financial Instruments Directive, MiFID II, signals a period of great uncertainty for financial institutions and market infrastructures.
Swathes of the markets for financial instruments are being completely remade. After extensive consultation, the legislative process1 is entering a critical phase with only a few rubrics still to be finalised.
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Mifid II how to capitalise on the creative destruction of the status quo
1. MiFID II for Dealer Banks
How to capitalise on the creative destruction of the status quo
The second chapter of the Markets Infrastructure Financial Instruments Directive, MiFID II,
signals a period of great uncertainty for financial institutions and market infrastructures.
Swathes of the markets for financial instruments are being completely remade. After
extensive consultation, the legislative process1
is entering a critical phase with only a few
rubrics still to be finalised.
Impacts are profound. Business models and profits are under threat and the move to the
regulators’ desired future state is likely to be both painful and costly. Once the dust has
settled, the way certain markets function may be unrecognisable, with clear sets of winners
and losers.
How will you secure your place on the winning side?
This paper examines MiFID II specifically from the perspective of the dealer banks2 and the impact
on their OTC derivatives business. We identify key threats and new opportunities, suggest critical
next steps and highlight those remaining areas of uncertainty still to be resolved in the next rounds of
consultation and second level texts.
____________________
1
MiFID II has a legislative deadline of 3rd
July 2016 for conversion into domestic law and 3rd
January 2017 to take effect.
2
Any bank or broker-dealer involved in executing trades with clients, particularly OTC derivatives.
10. Meet our authors
christianlee@catalyst.co.uk
Disclaimer: Comments in this presentation on are based on Catalyst's understanding of the global regulatory landscape as of June 2015.
This document is neither intended to be comprehensive, nor to provide legal or accounting advice.
Catalyst Development Ltd, 167 Fleet Street, London, EC4A 2EA
T +44 (0) 870 901 4155 F +44 (0) 871 433 8876 www.catalyst.co.uk
debasreebhattacharya@catalyst.co.uk
About Catalyst
We are experts in optimising our clients’ balance sheet, reducing the
total cost of trading and enabling regulatory compliance.
We work in joint teams with our clients, combining our experience in
financial markets and programme execution to deliver results. We
provide honest guidance to help you succeed.
We are proud winners of the Queen’s Award for Enterprise:
International Trade 2015 for our impact on global financial markets.
We are Catalysts for enduring excellence.
Christian Lee
Christian leads Catalyst’s
Clearing, Risk and Regulatory
team.
He is acknowledged as a world
leading authority on risk, with in-
depth specialist knowledge of
OTC clearing and experience in a
variety of risk management roles
and specialisms, including market
and credit risk, financial markets,
middle office and regulatory
matters. .
As Head of Risk at LCH, Christian
managed the Lehman’s default:
the biggest market-shaping event
of recent times
Debasree Bhattacharya
Shree specialises in derivatives
clearing, compressions and valuations
and is an expert in OTC clearing,
Swaps Compressions, risk, profit and
loss production.
She is an experienced practitioner in
interest rate derivatives and structured
funds business including risk, profit and
loss production, trade capture, market
data and industry protocols/trade
capture platforms, products, trade
reviews and pricing techniques.
Shree has worked extensively in the
implementation of OIS discounting and
CSA pricing, remediation of incorrectly
designated financial product types and
redesign of risk production platforms.
Damon Batten
Damon is an expert in the field of
OTC derivative reform and
regulation, having worked with
exchanges, central counterparties
and banks around the globe to
understand, manage and respond to
the challenge of regulatory change.
He is a specialist in the European
Market Infrastructure Regulation,
MiFID II, the Dodd-Frank Act and
associated CFTC Rule-making, the
CPSS-IOSCO Principles for Market
Infrastructures, and the BCBS
IOSCO standards for Bank
Exposures to Central Counterparties
and Bilateral Margining for non-
Centrally Cleared Derivatives.
damonbatten@catalyst.co.uk