Mifid starts race for price-discovery products

The EU directive is expected to cause fragmentation, although its effects might not be felt immediately

Received wisdom is that one of the effects of the European Union's markets in financial instruments directive will be a fragmentation of liquidity as alternative trading systems and systematic internalisers, which allow the private matching of orders away from exchanges, compete with traditional stock exchanges.

The difficulty for fund managers is how they will discover the best price for a stock and ensure brokers are delivering on that price promise.

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