Mifid II cost disclosures pose risk to liquidity, warn banks

Dealers hope standardised methodology for some clients could mitigate impact

Dealers fear having to disclose costs on a trade-by-trade basis prior to execution will increase latency

Dealers have warned that Europe’s incoming cost disclosure requirements for over-the-counter derivatives trades will significantly increase trade latency and impact market liquidity for plain vanilla instruments. Banks are hoping regulators bless a standardised, grid-based methodology for trades with professional clients, which they say may help ease the burden.

The revised Markets in Financial