Liquidity Landscape: MiFID II – The beginning of the end?

Across global markets, recent rises in interest rates mean fixed income and even cash deposit accounts, can be competitive with equities for investor’s asset allocations. Despite the technology fuelled rallies, the prospect of higher inflation and an economic downturn has resulted in liquidity in continuous markets remaining light, continuing to challenge participants’ ability to execute in volatile markets. With the Swedish Presidency concluding with the EU Council and Parliament agreement on the MiFID II, the regulator’s ability to address depressed secondary market activity continues to be a challenge. Lit volumes set record lows in April, May, and June, falling to 41% of overall activity in June, down from an average 50 - 60% throughout 2018 - 2021.

This report has been compiled by Gareth Exton Head of Liquidnet's Execution + Quantitative Services EMEA , in partnership with Rebecca Healey, Redlap Consulting.