Stock trading costs fell significantly last year, when markets began to feel the impact of new European Union rules aimed at boosting investor protection, a report showed on Tuesday. The MiFID II directive, introduced one year ago, has brought trading costs under closer scrutiny, and many asset managers have negotiated lower commission rates, Greenwich Associates said on Tuesday.

Combined average commission rates fell to 8.4 basis points (bps) in 2018 from 9.7 in 2017 in developed markets, and to 12.7 bps from 16.7 bps in emerging markets, while they rose to 40.1 bps from 34.0 in frontier markets, it added. The rules also resulted in an increase in asset managers' activity in lower-cost electronic trading, which contributed to the reduction in execution rates, it said.

Copyright Reuters, 2019