European investment banks that have invested heavily in their stock trading divisions are still losing ground on US rivals, as new financial regulations begin to skew the market towards the largest banks. Analysts at Morgan Stanley say there are early signs that the European Union's revised Markets in Financial Instruments Directive, which has changed the way equities and other financial assets are traded, is favouring Wall Street banks operating in the region. European banks "appear to be losing share, and we will be watching this closely for less scaled players, particularly Deutsche Bank, Barclays, BNP [Paribas], HSBC,” Morgan Stanley analysts, led by Magdalena Stoklosa, wrote in a report this month. Under Mifid II, which came into force on January 3, banks are subject to enhanced 'best execution' requirements that force them to secure the best deal for fund managers when trading on their behalf.via