Rules and return is the show where we delve into the regulatory challenges and opportunities of the Financial Markets around the globe. We will speak to the top newsmakers. First tower top story. They can accept payments. A 30 month reprieve to u. S. Firms on the research will that are coming into effect in january. Great to have you. You have been all over this story from the very beginning. Why did the sec decide to do this . The industry here in washington has been pushing for months to get the sec to tell them. They can accept payment from their european clients and not have to register as an investment advisor. They do not want to register in the u. S. Has that carries a bunch of new responsibilities and costs. Relief thathe sec they announced today is limited to european clients, so they can continue to Bundle Research with Trading Execution Services in the u. S. For their clients. Nejra you describe this as a major victory for u. S. Brokerages and firms. It takes away a level of uncertainty. It doesnt give them any advantage over their european peers . What it shipped up over the last couple of weeks or months was a bit of a square off between the u. S. Brokerages and their pension fund clients. Pension funds in the u. S. Have essentially wanted a system like we are about to get in europe, where you can pay for your research with whomever you want. At the same time, you can buy your Trading Execution Services of someone else. By the sec stepping in, they are essentially going to continue to have a situation in the u. S. Were some firms will continue to Bundle Research and trading execution here for the u. S. Clients. Investor advocate will probably not be very happy in the u. S. With this. Wall street brokerages pushing for this and do enjoy a lucrative business from bundling the Research Trading execution, they will be happy about it. Nejra brokerages are happy. This reprieve is for 30 months. What happens after that . They will take some Public Comment over the next year and a half or so. It is unclear what will happen. It is possible they will come out and released a rule. What the sec has done is provide some guidance around a 1940 law. The laws in the u. S. Go back to the 1930s and 1940s. We have a lot of guidance and interpretation from the sec since then. What firms have are clear guidelines and what they can and cannot do. It is quite possible that after 18 months or a couple years, the sec will come back and say lets have a new rule. Nejra thank you so much. That is the latest from washington. Lets dive into dark pool. Dark pools face a major regulation. They buy and sell large orders of stocks or block trades. This keeps the order hidden from other traders that could bet against it. It becomes more important with. He highfrequency of traders hiding and dark venues refuses the flow of information that makes public stock exchanges efficient. That is why the eu is setting limits. Measures which would bar three quarters of the european stocks from dark pools. Traders determined to stay in the dark can switch to a new market. These replace banc one networks that currently account for half of dark trading in european equities. Thanks will be able to carry out unlimited dark trading as long as it is their own capital at risk. It remains to be seen where the trades will go. To keep tabsomised on this. The only certainty is that its already fragmented equity markets are about to become much more complicated. Repairing to the London Stock Exchange is leading the pack. I spoke exclusively about what the new rules will mean for the business and exchanges. I asked him whether he thinks internalizes might pose a problem. What i would say about systemic stabilizers, the market need. Iverse as long as there is a level playing field, we should not inhibit certain forms of trading because that could lead to the reduction. A successful market is not necessarily measured by aggregate volumes at the end of the day but by stability at a particular point in time to satisfy the liquidity needs of investors. Retail investors, a traitor, a propriety trader, in institution, banks, sovereign fund. When divers forms of trading converge, you get that rich texture of liquidity insurers the success of the market. Nejra he said it is a christmas of opportunity. Believe it can. This greater all around transparency. The need for Institutional Liquidity can be matched. We believe we offer a competitive set of platforms. We think our customers will benefit. One of the issues for many institutions or traders who risk inthe transfer of large blocks, one of the issues that came out introduced competition. Exchanges have become complacent. Technology was old. Liquidity was not that great. There was a feeling that without competition, it performance was not going to improve. I think positive reaction from the market. That competition forced innovation and deep thinking about how exchanges are operated. It highlighted one issue that we see today with the european proposal. Isolate poolsly of liquidity. It would maintain synchronicity in the process of many exchanges trading the same security. Atomization, an ever shrinking amount of leverage. It gives us an opportunity to fix some of the things that could be completely taught through. Competition in order to introduce improved performance by exchanges. By introducing fragmentation that created a lot of cost and atomization. Atomization in particular meant average transactions went from same thing on the new york stock exchange. The ability to transact large transactions. We also offer for platforms like turquoise the right type of algorithm and relationship with customers, the opportunity to accommodate large sized lock trading. It is the need of certain constituents. Nejra those are some of the opportunities. How committed to be made even better for your illness your business . There are risks and challenges. Isolation as encompassing and complex, especially the range varies. Clearing. T it opens up a new framework that will break the old monopoly. They operate on the line where the Exchange Industry is operated prior to 2007. We will see major changes. Putting that aside, the challenge is the range of complexity of changes that are into to be technically put action and industry. That means a lot of coding, migration, new systems. There are thousands of ends at two shins, asset managers, exchanges that have to redo their systems. That is the main challenge today. One of the questions we got yesterday, will you allow another extension . The answer was no. Will the industry be ready in time for january 2018 . Nejra there is an idea that there might be some sort of moving in after january 3. What will you do to members that are not compliant at 8 00 a. M. On january 3 . Sometimes it is well understood. We are a have commercial organization. We have a contractual relationship with our customers. We do not determine, other than compliance with these contractual obligations that they have to us and we have to them. You do not have regulatory if they aretermine proper or complying with the full range of the law. That is a matter for regulators. From what we can tell today, the level of preparation of our members tend to be essentially brokered well advanced. Nejra next, more from our exclusive interview. We get his thoughts on the future of the ipo. This is bloomberg. Nejra welcome back to Bloomberg Markets rules and returns. It is a big win for Financial Firms on capitol hill. Voted to overturn a Consumer FinancialProtection Bureau rule that makes it easier for consumers to sue banks. It was created after the financial crisis. Arrangements for Financial Services are likely to continue during the brexit transition phase. Government looking to assure companies. David davis expects financial during a twoyear bridging period. Sachs group is considering bulking up its Research Coverage of mall and midcap companies. It is likely to shrink trading volumes in that stock. A Goldman Sachs spokesman declined to comment. Bank tot nordic announce status. Breaking these announcements before the deadline comes into effect in january. One for foreign exchange, cash bond derivative. That is your regulation news roundup. Nejra London Stock Exchange ceo has hit back at critics. He said listing rules were bent to pave the way for an ipo. The u. K. Investment association argues that 25 should be the minimum level for any Premium Listed Company in the u. K. He spoke exclusively to me and said that is simply not the case. There are some that say there is a 25 equity rule as part of in the market. I have read some of these comments. There is not a 25 governance rule that mandates a minimum of 25 . It is a liquidity test. In the past, there have been in since his of companies which were extremely large that obviously would provide substantial liquidity that were allowed to list on the premium market with less than 25 . This happens in the United States all the time as well. Lets not confuse governance. Liquidity test is ensuring that there is less than 25 on the market, that there is enough liquidity to ensure smooth trading. Nejra what is your reaction to recent press reports that they are considering shelving the International Part of the ipo . Is this to do with london become any less attractive . In general, do you think london is becoming less attractive with brexit looming . If you look at this years numbers, our business is up substantially. The funds have raised. Have 100 r b in our markets. We raised over 40 billion pounds. Companies not just in the case but around the world. If you look at any of the indicators in our listed markets , the same applies to colleagues. Debt, liquidity and range of ipos is on the increase quite sharply. Also infrastructure debt, foreign currency, chinese issuance, we have had 16 u. S. Listings this year so far between the main market. It is quite the opposite. Liquidity isus sustained. I cannot give you any more details since we are publishing tomorrow the third quarter. The public data that we have already released shows we have been quite successful this year and helping many more companies moreovernment raise capital than the last couple of years. Nejra interesting. The second largest shareholder given the recent rift between saudis and qatar, i want to see how that is impacting your chances of winning the listing in london. Are listings in london from general geopolitical risks in a general sense . I would not speak specifically about any customers. Qataris are me, the the largest, not secondlargest. They have moved convincingly to the top tier of our industry. , decisionstimately about Capital Raising are linked to one thing. Performance. If you perform for your clients and deliver the liquidity and service, the type of products are products area and products. Nejra up next, we will talk deceptive in the Banking Industry and how they could amount huge charges and opportunity. This is bloomberg. Nejra welcome back to Bloomberg Markets rules and returns. Lets talk the future of banking. You wish and that could reshape the industry in the new year. Service directive could have wide ranging implication. It has the ability to break down Bank Monopolies on consumer data. People could use third parties like amazon to make payments without being redirected. Does this mean banks will no longer be competing solely against banks but against everyone offering Financial Services . Is this apocalyptic for the banks . Not necessarily. It is a big change for them. It is one that has been building in the marketplace for some time. It will not be a sudden break. It will have to adapt to a number of new players coming out. We will no longer be able to dominate the market in the way that they have. The most important element is that they will have to share Customer Data with all these in thecompanies and apps world that are moving into the payment space. It is creating an entirely new marketplace by law. Nejra in terms of regulation, this is very different to what is happening in the u. S. Does it put european banks at a disadvantage to the u. S. . That is an interesting question because at first, it would appear to be. Brussels mandates that you shall do this and share all your data. The sort. Othing of it is being shaped by the marketplace. It is a hodgepodge. By forcing the european banks to get with the program with digitalization, it could make them leaner and more responsive to their customers. That is the ideal that the law is going for. By law, they will have to get there act together. Nejra if we see banks come well out of this, we really start to see that difference. Most experts looking at the marketplace, you will see a separation between those banks that are really out in front, trying to provide the best for theirking app customers, allowing their customers to aggregate all their andncial needs in one place realizing they have to do that to keep their customers. Ou will have laggards he will have Financial Institutions that do not really want to do this, form the teams the innovation teams that have to put this together. You will see separation. Ironically enough, it is the u. K. That is actually setting the pace for open banking area and the u. K. Has actually created in open Banking Initiative which will standardize the way all the banks share their data with syntax, apple and so forth. The other countries in the eu are catching up. The u. K. Has bought into this and has helped lead. It will not be withdrawing from psd2 as a result of brexit area and brexit. Nejra what does this mean for consumers . A lot of choice. They will be inundated with any that help them save money, make payment, help them manage their current their investment. It is crazy how chaotic the market will be. Together all apps this in one place and make sense of it for the consumers. Nejra thank you so much. That is it for this edition of Bloomberg Markets rules and returns. If you have any questions or comments, you could drop the team in email. This is bloomberg. Poole will be the next fed chair . President trump has the markets on edge and he eases his topic for the job. President trump i have somebody very specific in mind and i think everyone will be impressed. Yousef governor Jerome Powell could be who he is leaning towards. Topped 60 a barrel for the first time in two years. Saudi arabia pushing for extending bills output cuts. A drop in oil classes