Why MiFID II takes away US edge in ETFs

Accelerating ETF adoption

MiFID II, the package of comprehensive Europe-wide rules designed to strengthen protection for investors and improve transparency, was formerly enacted at the beginning of 2018, in a move which should accelerate adoption of ETFs in Europe - a market that already grew by over 40% last year.

MiFID II is significant for ETFs because it will finally create a transparent record of ETF trading activity in an industry, which despite the 'E' in its name, has seen the majority of trading occur in private bilateral over-the-counter markets, obscuring the full extent of market activity around these popular products.  Why liquidity matters Prior to MiFID II there was no requirement to report ETF trades, meaning that investors could only view the tip of the trading iceberg relative to the real level of underlying activity. Now all ETF trades will need to be reported, meaning inves...