MiFID II drives liquidity drought as broker research coverage falls

Mid-cap liquidity suffers most

Almost eight months after the introduction of MiFID II, the regulatory framework has already contributed to a reduction in trading liquidity and broker research across most areas of the market.

MiFID II, which took effect on 3 January, requires buy-side firms to pay for research as an 'unbundled' product, separate from other broker services. BofAML sees analyst exodus as MiFID rules hit research...