Reuters is offering clients the ability to see the best bid and offer price on major stocks wherever they are quoted as of 22 October 2007.
The consolidated price will enable clients to comply with the Markets in Financial Instruments Directive’s (MiFID) best execution requirements via a special type of Reuters Instrument Code (RIC) known as “. x”.
These RICs will bring together data on all trades around a stock as they happen so that the best offer will be available. Banks need a cost effective means of consolidating data in one place to allow them to comply with MiFID which comes into force on 1 November 2007.
The introduction of MiFID is likely to mean price visibility will fragment. In the US this problem has been solved by a national best bid and offer price mandated by the Securities and Exchange Commission (SEC). MiFID leaves market forces to provide the same solution in Europe, a stance to which Reuters is responding to with the “.x” RIC.
Under MiFID all investment firms will be required to show transparency by publishing data on all trading activity that does not take place on an exchange or Multilateral trading Facility (MTF) immediately after a trade is done.
“Our customers know that MiFID is the biggest regulatory change to hit European markets in the last twenty years. That is why Reuters is offering them the key tools they need to comply with the new regulations. It is crucial for them to know what the best bid and offer on any major stock is, wherever it is quoted, and the new Reuters .x RIC will allow them to do this,” says Stephen Wilson, global head of Exchange Traded Instruments at Reuters.