25 April 2022

EBF Position on MIFIR Review

...the EBF finds it regrettable that several of the MiFIR reform proposals both for the equity and the non-equity transparency regimes are based on expected benefits that were neither subject to an in-depth analysis nor to a comprehensive impact assessment.

The European Banking Federation (EBF) is a strong supporter of deepening the Capital Market Union to enable financial markets to play a stronger role in light of the EU-27 financing challenges. The review proposal presented by the European Commission (COM) on 25 November 2021 is of critical importance to increase the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the Union’s regulatory framework.

With these objectives in mind, the EBF finds it regrettable that several of the MiFIR reform proposals both for the equity and the non-equity transparency regimes are based on expected benefits that were neither subject to an in-depth analysis nor to a comprehensive impact assessment. This makes the impact of the proposals very difficult to assess and could lead to unintended consequences for investment firms, clients and the EU capital market as a whole.

In more details,

• EBF supports a well calibrated consolidated tape. However, we would like to highlight that the creation of a CT will not solve the issue of increasing market data costs.
• On equity transparency, the EBF would like to highlight the need for ensuring competitiveness and attractiveness of EU equity markets. We believe the current proposal regarding equity SI will create a three-tiered set of mid-point trading rules exacerbates the existing issues of complexity afflicting equity markets in Europe and damages investors’ perceptions of the quality of the market’s structure.
• On non-equity transparency, there is a need for well-calibrated deferrals taking the needs of clients and liquidity providers into account. In this context, both price and volume need to be deferred for longer periods than proposed by the Commission (i.e. endo of the day). We also support to keep the the size specific to the instrument (SSTI) as it is since it protects SIs against undue risks.
• Regarding payment for order flow, MiFID II already provides for a broad toolkit of regulatory measures in this scope (i.e. well calibrated provisions on conflict of interest, inducements and best execution).

Finally, our members’ experience from both MiFID I and MiFID II/MiFIR shows that there should be a minimum of at least 18 months from the time both Level 1 and Level 2 are published in the “Official Journal of the European Union” until they apply

EBF

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