Post MiFID II, dark trading should return to basics – Haoxiang Zhu and Carole Comerton-Forde

MIT Sloan Asst. Prof. Haoxiang Zhu

From Oxford Business Law Blog 

On January 3, 2018, the revised Markets in Financial Instruments Directive, or MiFID II, became effective across EU member states. This comprehensive and far-reaching regulation will shape European capital markets in years to come. Among other things, MiFID II puts several restrictions on dark pools in European equity markets: (i) Broker Crossing Networks are essentially banned; (ii) dark pools that rely on “reference prices” on exchanges can only execute trades at the midpoint of exchange best bid and offer; and (iii) dark pools are subject to volume caps of 4% for a single venue and 8% across all dark pools (colloquially referred to as the double volume caps). On the other hand, MiFID II keeps the “Large in Scale” (LIS) waiver, so sufficiently large transactions can still go through without being counted toward, or affected by, the double volume caps.

Jargon and technical details aside, these MiFID II rules essentially push dark trading to return to basics: the matching of large institutional orders to reduce price impact (for both sides). Price impact—the very act of buying or selling moves prices adversely—can be quite costly for institutional investors, especially in today’s market where alphas are hard to generate and high-frequency traders watch every market movement at the microsecond level. By reducing the price impact of trades, investors enhance returns. Read More »

Jackie Wilbur: MBA job offers back to pre-recession numbers

Despite the ongoing economic turmoil, the job numbers for our MBA class of 2011 are very strong. In fact, we’re back to the same offer rates we saw before the recession.

As of this writing, 94% of the class has an offer. This is up from 81% last year and closely matches the 93.4% we saw in 2006 and 92.7% in 2007. Similarly, on-campus recruiting opportunities were back to the same levels we saw in 2006 and have so far remained firm as we move into this academic year.

Read More »