Michael Chlistalla

The New Landscape - How MiFID Drives Changes Among European Execution Venues

The Markets in Financial Instruments Directive (MiFID) is the new regulatory framework for investment services in the European Economic Area (EEA) and has to be applied by investment firms and Regulated Markets in Europe from November 1st 2007. It is expected to trigger fundamental changes in the European trading landscape. The article outlines a framework that serves to classify new initiatives in equities trading. This framework is then applied to present recent initiatives by established exchanges or investment firms that are based on the new opportunities provided by MiFID in the context of multilateral trading and internalisation.

Modifying the Balanced Scorecard for a Network Industry The Case of the Clearing Industry

The Balanced Scorecard (BSC) is a well-established framework for the management of a company as it integrates financial and non-financial perspectives. Little attention has been given to its theoretical and conceptual valuation. We illustrate how the stakeholder value theory corresponds with the concept of the BSC and show the importance of underlying cause-and-effect relationships between its perspectives. For the case of clearing in Europe which is currently facing profound changes, we present our three-phased approach how to adjust and to extend Kaplan and Norton’s original concept. We modify the generic BSC by adding risk management as a separate perspective and by integrating competition and IT. Based on multiple case studies, we then validate whether the modified BSC is suited to meet the specifics of the clearing industry.

The Impact of New Execution Venues on European Equity Markets’ Liquidity - The Case of Chi-X

With the Markets in Financial Instruments Directive in effect since November 2007, new trading venues have emerged in European equities trading, among them Chi-X. This paper analyzes the impact of this new market entrant on the home market as well as on consolidated liquidity of French blue chip equities, newly tradable on Chi-X. Our findings suggest that owing to this new competition the home market’s liquidity has enhanced. This is apparently due to the battle for order flow which results in narrower spreads and increased market depth. These results imply that overall liquidity in a virtually consolidated order book is in the French case higher than without the new competitor.

Implementing MiFID by European Execution Venues - Between Threat and Opportunity

This article describes the results of the study “MiFID — The perspective of European execution venues”, which was conducted among 33 European execution venues in the third quarter of 2007. The study assesses the status quo of the implementation of the Markets in Financial Instruments Directive (MiFID) immediately prior to its applicability date November 1st 2007 at European execution venues. It identifies new services that execution venues are implementing or intending to implement and evaluates the perspective of European execution venues concerning the impact of MiFID on competition in the industry, on key market quality indicators and on market structure.

The Impact of Information Technology on European Post-Trading

The European post-trading landscape is recently changing fundamentally due to regulatory actions, the financial crisis, and the strong linkage of the global financial markets. The systemic importance of post-trading infrastructures underlines the industry’s significant dependence on safe and efficient processes and thus the importance of reliable IT-systems. Using the Delphi methodology in a study among a multitude of experts from different areas of post-trading, we developed a joint and coherent view of the most important issues relating to IT the post-trading system has to cope with.

Competitive Clearing in Europe: Development of a Performance Measurement System in a Changing Environment

European clearing houses are facing competition on their home markets for the first time. In order to meet this new challenge, the management of a clearing house needs to identify its stakeholders and their interests and must define a strategy including financial and non-financial aims, which have to be clearly communicated internally. We introduce the Balanced Scorecard as a funded and holistic approach for the management of a clearing house. To meet the specifics of the clearing industry, we present an adjustment and extension of Kaplan and Nortons original concept. Particularly risk management requires detailed consideration. We therefore add risk management as a separate perspective and integrate competition and IT into the modified Balanced Scorecard.

The Future of European Post-Trading: Consequences for Risk Management in View of the Financial Crisis

The European post-trading landscape is recently changing fundamentally due to regulatory actions, the financial crisis, and the strong linkage of the global financial markets. The systemic importance of post-trading infrastructures underlines the industry’s significant dependence on safe and efficient risk management processes. Using the Delphi methodology in a study among a multitude of experts from different areas of post-trading, we developed a joint and coherent view of the most important issues relating to risk management the post-trading system has to cope with.

Neue Börsenlandschaft in Europa? Die Umsetzung der MiFID aus Sicht europäischer Marktplatzbetreiber

Der Beitrag beschreibt die Ergebnisse einer im dritten Quartal 2007 durch das E-Finance Lab durchgef hrten Studie. Gegenstand ist die Untersuchung des Umsetzungsstandes der europ ischen Ausf hrungspl tze in Bezug auf die Finanzmarktrichtlinie MiFID. Weiterhin zeigt die Studie die Sicht der Marktplatzbetreiber auf k nftige Auswirkungen der MiFID im europ ischen Wettbewerb, auf wichtige Indikatoren f r Marktqualit t und auf zuk nftige Marktstrukturen im europ ischen Aktienhandel. Die Ergebnisse zeigen, dass die etablierten Marktplatzbetreiber davon ausgehen, k nftig einem verst rkten Wettbewerb durch neue Ausf hrungspl tze ausgesetzt zu sein. Diesem steigenden Wettbewerbsdruck versuchen die gro en europ ischen Marktplatzbetreiber mit neuen Services zu begegnen. Vor diesem Hintergrund werden im zweiten Abschnitt des Beitrags zum einen neue Wettbewerber sowie die neuen Internalisierungsservices der drei gr ten europ ischen B rsenbetreiber vorgestellt.

Managing Performance with the Balanced Scorecard - The Case of the European Clearing Industry

European clearing houses are facing competition on their home markets for the first time. In order to meet this new challenge, the management of a clearing house needs to identify its stakeholders and their interests and must define a strategy including financial and non-financial aims, which have to be clearly communicated internally. We introduce the Balanced Scorecard as a funded and holistic approach for the management of a clearing house. To meet the specifics of the clearing industry, we present an adjustment and extension of Kaplan and Nortons original concept. Particularly risk management requires detailed consideration. We therefore add risk management as a separate perspective and integrate competition and IT into the modified Balanced Scorecard.