MiFID II liquidity drought deepens as research coverage continues to fall

Mid-cap AIM stocks hardest hit

Almost a year on from 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. MiFID II drives liquidity drought as broker research coverage falls The introduction of the new rules has already seen asset managers reduce the amount of research and number of brokers they are using, which in turn has prompted analysts to start leaving brokers in their droves, while liquidity has declined across the market. Analysis from research provider Hardman & Co reveals that since the beginning of the year, liquidity levels ac...