“I have repeatedly called on and written to Commissioner Barnier to back up my public request that MiFID be divided up into different areas. I was convinced that we would actually do a better job if we were able to concentrate on the different areas separately. So, for example, the equities side is a review looking at what’s already happened, and therefore it’s in a very different place from the non‑equities, which is the initial application of these rules to a brand‑new area. I thought it would be a lot easier and actually more expedient to separate them out, particularly derivatives.
If you look at the US, the clearing components have been dealt with at the same time as the trading element of derivative instruments, whereas we’re separating them into two different bits. We’re doing the clearing and repositories in EMIR (European Market Infrastructure Regulations), which is going through Parliament at the moment, but we’re actually leaving the trading of derivative instruments until MiFID.
For me, that’s the wrong way around. I’d prefer to do the trading first, and then look at what happens after the trade. In my opinion, it’s better to get the trading right first, and then to look at post‑trade operations, but we’re actually in the reverse situation, we’re doing the clearing repository requirements first in the regulation. And these are regulations, not directives. Which means that MiFID’s hands may well be quite tied when it comes to the trading of these instruments, because a regulation is a senior law to a directive.”
© The High Frecuency Trading Review
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