In a letter (seen by Reuters) dated October 30 to Rapporteur Ferber, Barnier said: "The same principles that apply to derivatives apply equally to bonds: like derivatives markets, bond markets are dominated by dark trading which hinder effective price formation and this opacity protects from competition a handful of brokers". "In the same way as for derivatives markets, the current drafting would simply keep the status quo by allowing these markets to continue working in total opacity", he said.
Ensuring that bond trading moved to electronic platforms open to all would broaden investor choice, Barnier said. Unless changes to the texts were made, the EU would not be meeting pledges it and other members of the Group of 20 leading economies made to improve transparency in markets, he said. "Should the transparency regime, as finally approved, lead to an increase of trading of derivatives instruments on dark venues this would completely defeat the objective of the G20 commitment and undermine our common efforts to render the EU financial sector more stable and solid", Barnier said. “I would therefore encourage you as co-legislator to revisit the transparency regime in MiFIR [MiFID II’s attendant regulation] to ensure that the EU can comply with its G20 commitment on trading of derivatives.”
A spokeswoman for the European Commission said in a statement: "We are concerned about some elements of the text in discussion in trilogue as it seems we are largely back to status quo/MiFID I, notably for non-equity markets. We remain confident that we will find appropriate solutions together with the co-legislators."
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