Part III Trading, 18 MiFID II and Equity Trading: A US View

Subject(s):

Enforcement — Investment business — Market abuse — Market Abuse Directive (MAD) — Regulated activities — Supervision

This chapter provides a U.S. perspective on the MiFID II equity trading regulation. The author concludes that a comparison of the EU and U.S. market structure rules, and the concerns that generated them, suggests four three key differences. Relative to the United States, the EU shows (i) more concern with having an effective price formation process, (ii) more concern with the possibility that HFTs contribute to price instability and engage in market abuse, (iii) less concern with promoting competition among trading venues. These differences have characterized the MiFID I era and are reflected in MiFID II as well, although MiFID II does evince somewhat greater concern about competition among trading venues than was true before.