Did the implementation of MiFID affect the ability of the investors in the European equity market to reach their investment objectives?

DOI: 10.5176/2251-1997_AF18.33

Authors: Cheikh Niang and Alois Kanyinda-Kasanda

Abstract:

Using a new approach in the literature based on portfolio theory, this article shows that the directive did have an impact on the quality of the NYSE EURONEXT market and the equity investors’ ability to reach their investment Objectives. In fact, the results show that the MiFID participated in improving investors’ anticipations which materializes in an overall higher capability to track their respective benchmarks. These results confirm previous research finding an increased market quality due to the implementation of the directive.

Keywords: MiFID, Tracking Error, Market quality, Market efficiency, Benchmark, NYSE EURONEXT.