(The Telegraph) -- A sweeping piece of EU legislation aimed at saving European investors millions of pounds in unnecessary trading costs is failing to do the job, new analysis claims.
City veteran Alasdair Haynes, who set up European exchange Aquis in 2013 with the backing of former Barclays executive Rich Ricci, has argued that investors are still being ripped off despite the new EU trading rules that came into force in January.
“Mifid II makes it clear that both fund managers and banks have a responsibility to their investors to carry out trades on the best venue,” he said. “A big part of that is naturally getting the best price. At the moment, it is clear to me that this is not the case.”
Looking at the difference between the price of a stock when an order is received and the price of the same stock five minutes later, Mr Haynes claims that investors, such as pension funds, are losing up to €2.3bn (£2bn) on unnecessary trading costs each year.
“Many people don’t realise that the price at which they buy a stock is not necessarily the price that they are initially quoted,” he said.
Mifid II is one of the biggest regulatory upheavals to hit the City in years, influencing almost every part of the process for those involved in shares.