MiFID, Reg NMS and Competition Across Trading Venues in Europe and United States

Journal of Financial Regulation and Compliance, Forthcoming

Posted: 15 Jan 2009 Last revised: 15 Sep 2009

See all articles by Giovanni Petrella

Giovanni Petrella

Università Cattolica del Sacro Cuore

Multiple version iconThere are 2 versions of this paper

Date Written: March 18, 2009

Abstract

Although MiFID and Reg NMS share the common objective of enhancing competition in securities markets, they differently regulate the best execution duty, the consolidation of market data and the publication of execution quality information. These differences are particularly relevant since they affect the competition for order flow across trading venues. In particular, some of the provisions set forth by the US regulation appear to be more pervasive, compared to the EU ones, in strengthening competition for order flow among trading venues.

The paper also provides an investigation of the degree of market fragmentation among incumbent exchanges and new trading venues in European and US securities markets, and suggests possible explanations for understanding the current macrostructure of such markets.

Keywords: Regulation NMS, MiFID directive, Best execution, Market data consolidation, Fragmentation

JEL Classification: G15, G18, G24

Suggested Citation

Petrella, Giovanni, MiFID, Reg NMS and Competition Across Trading Venues in Europe and United States (March 18, 2009). Journal of Financial Regulation and Compliance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1326963

Giovanni Petrella (Contact Author)

Università Cattolica del Sacro Cuore ( email )

Largo Gemelli 1
Milano, 20123
Italy
+39 02 72343007 (Phone)

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