EBF Trilogue position on MiFID II/MiFIR

10 July 2013

The EBF has taken a great interest in the MiFID review (MiFID II) and has engaged with policymakers at all stages of the co-legislative procedure.

European Banks favour capital markets that function properly and efficiently in order to serve the real economy. MiFID II will play a key role in this respect.

Key Points:

• The EBF however fears that some of the MiFID II provisions could negatively impact European Capital markets and encourages the co-legislators to preserve quality of legislation over speed.

• The EBF believes that market transparency underpins trust between all market participants. However, waivers to this principle should continue to be allowed to prevent unwanted impacts on the price formation process and on liquidity. Therefore, the EBF calls on the co-legislators to guarantee appropriate pre-trade transparency and post-trade transparency calibration tools for equities and non-equities in the level 1 text which could be further developed in level 2.

• The use of proprietary capital as a tool for facilitating client orders is often key in liquidity provision for certain categories of instruments. Most EBF members therefore believe that the OTF operator should not be prohibited from trading against proprietary capital as a service to clients.

• The EBF believes that it is important to enable clients to choose a less costly advice on the basis of proper disclosure of inducements. In this respect, most of EBF members supports the European Parliament’s approach where enhanced transparency is introduced.

• The EBF strongly encourages the co-legislators to give ESMA sufficient time to produce thorough impact assessments and engage in adequate public consultation while ESMA is preparing delegated or implementing acts and the technical standards.

• Finally, it is also vital to allow enough time between the finalisation of all the rules and the implementation date so that market participants and market infrastructures can make and safely test what may need to be significant system changes.

Full paper

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