EBF Position on MIFIR Review
25 April 2022
...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
© EBF
