Hello and welcome back to the Fides Weekly Update. Here you’ll find a summary of what’s been happening in your industry this week.
For a brief round-up of the key developments, scroll down to take a look our regular ‘Movers & Shakers of the Week’ feature.
1. Regulator efforts to discourage the use of dark pools had ‘limited success’
Following the first anniversary since the launch of MiFID II, Europe’s financial regulator has looked into its success in curbing the amount of dark pool trading as part of its annual ‘Trends, Risks and Vulnerabilities’ (TRV) report.
Under the MiFID II directive, the European Securities and Markets Authority (ESMA) devised and implemented a temporary cap on trading volumes in dark pools, with an aim to guide investors to trade on public exchanges. The report confirms that the cap led to a considerable fall in trading, where volumes in dark pools were only 1 percent of the total traded in August 2018, compared to 7 percent six months earlier.
However, the cap was lifted in September and caused dark pool activity to bounce back to 5 percent, demonstrating continued investor interest.
Dark pools can present disadvantages for public investors as prices are hidden on dark pool trades until after completion, by which point the public investor is in a worse trading position.
In order to remedy this without prohibiting dark pools, which are important tools for institutional investors to carry out sizeable trades, regulators decided to place a temporary cap on the total volumes of trading that can take place per individual stock in a dark pool.
ESMA was given a deadline of 3rd March to submit feedback to the European Parliament on the impact of its volume cap mechanism. It’s now expected that the regulator will have to amend its rules given the cap has proved an ineffective solution in dissuading investors in the long-term.
Also featured in the report were concerns around the risks of individuals investing in risky products, such as virtual currencies and Initial Coin Offerings (ICOs), as well as high level market risk pertaining to uncertainties from ongoing Brexit negotiations.
Access ESMA’s full TRV report here.
2. Law firm research indicates the most effective initiatives to increase gender equality at your firm
Preliminary results released by Thomson Reuters Transforming Women’s Leadership in Law (TWLL) programme and legal research platform Acritas, reveal that not all initiatives to increase gender diversity in law firms are effective.
By correlating female retention rates with the diversity initiatives implemented at participating law firms, the study hopes to identify the most effective practices for driving greater gender equality in law firms.
The initiatives with the greatest positive impact on female retention include: mandatory female representation on pitching teams, publicly declaring gender targets and having a quota for the number of female candidates on partnership promotion rounds.
On the other hand, women-only groups and networks were shown to be the least effective, most likely because such initiatives fail to engage the wider firm and lack the social accountability of the above policies.
Acritas chief executive and TWLL UK Advisory Board member Lisa Hart Shepherd said: “[The project is] about giving leadership and the diversity heads in law firms, and general counsel, some evidence to say, ‘these are the things you have to have in place to enable diversity’.
“We want to help the market as a whole to identify something it can truly embrace to encourage diversity.”
The data so far has been collected from 30 law firms, including three of the five magic circle firms, most of the ‘silver circle’ firms, and some European firms. The project is now calling for more to take part – especially top 100 firms – during the coming weeks.
The complete findings of the joint research between Thomson Reuters and Acritas will be published later this year.
3. Movers & Shakers of the week
Macfarlanes is set to lose two of its private client lawyers, including its private client property head Tristan Ward, while picking up another partner from Charles Russell Speechlys
Firms secures hire for new group aimed at helping Dentons to win national and cross-border investigation work ahead of Brexit
Schillings is to lose its seven-strong family team, led by partner Davina Katz, who is launching her own firm
Mayer Brown has hired Hogan Lovells corporate partner Steven Tran as it continues to flesh out its corporate practice in Hong Kong.
Aimen Mir joins Freshfields from the Committee on Foreign Investment in the United States (CFIUS) where he was a key official charged with reviewing and approving foreign investment transactions.
Mergers & Alliances
Office Openings & Closings
Capital markets lawyer Will Cai will help the Palo Alto-based firm launch its third Asian office after Shanghai and Beijing.
Shearman & Sterling is relocating three of its lawyers to South Korea as the firm opens an office in the country’s capital led by recently made up partner, Anna Chung.
Inclusion and Diversity
Technology and Innovation