Europe’s banks have taken much interest in the review of the Markets in Financial Instruments Directive – MiFID 2. Following the Council agreement on MiFID 2/MiFIR at the June Ecofin meeting, the European Banking Federation has produced a trilogue position in order to engage with the co-legislators.
Principally, European banks are in favour of capital markets that function efficiently in order to serve the real economy. However, this can only be achieved, say banks, if the final outcome of the trilogue negotiations recognises the following:
- to reflect their particular needs, market participants should retain a choice between executing on a trading facility or over-the-counter (OTC) because there are circumstances where it is not always appropriate to trade certain financial instruments exclusively on Regulated Markets, Multilateral Trading Facilities, Organised Trading Facility or Systematic Internalisers.
- pre-and post-trade transparency requirements should be properly calibrated according to (i) the specific type of instrument, (ii) the main features of their relevant markets, (iii) the size of the transactions and (iv) the type of operators and investors
- an Organised Trading Facility (OTF) should be regulated in a way that permits OTFs and existing venues to compete fairly for business whilst also allowing the different features of OTFs and other venues which justly provide diversified services that investors demand.
Finally, the EBF strongly encourages the co-legislators to give the European Securities and Markets Authority (ESMA) sufficient time to produce thorough impact assessments and engage in adequate public consultation while ESMA is preparing delegated implementing acts and the technical standards.