Responding to the European Commission’s review of the Markets in Financial Instruments Directive (MiFID), the Investment Management Association calls for consistent regulation across the retail market in Europe, as well as improved data in the wholesale markets. MiFID provides a comprehensive framework for investment firms offering services in relation to financial instruments, as well as rules to protect investors.

Commenting on the MiFID review in relation to the regulation of capital markets, Guy Sears, Director of Wholesale at the IMA, said: “We understand why the Commission wishes to draw up a comprehensive framework within which trading in all financial markets may operate. However, detailed rules which fail to take account of the specificities of different instruments and trading conventions will not achieve this aim. We support the Commission in its proposals to improve the quality of post-trade data in the equity markets. The Commission should ensure it has powers to introduce a consolidated tape even if time is still given for an industry solution.

“Transparency rules cannot be made for non-equity markets in general. Each market must be considered separately. We welcome improved market surveillance across all organised markets, as this allows investors to trust market information.”

Commenting on sections of the review relating to distribution and sales, Guy Sears said: “Alignment across European regulation (MiFID, UCITS, AIFMD and PRIPs) is needed to provide a level playing field for the operation of firms and for the sale of products across the European Union. Retail investors should be assured that all forms of retail investment products are subject to the same disclosure requirements. But making new rules alone will not be sufficient. Existing rules must be consistently enforced. A harmonised approach to the powers of supervisors and the sanctions imposed would benefit all market participants.”

“We object to the suggestion that UCITS funds should be split into complex and non-complex. This fails to recognise the existing and detailed regulation of UCITS and the required separation of roles, which are essential to investor protection.”

Press release

IMA MiFID review