Addressing certain options and discretions of MiFID
CESR has identified certain options and discretions within MiFID‟s markets provisions and consulted on the desirability of eliminating them or turning them into rules. CESR recommends retaining the discretion regarding the use of pre-trade transparency waivers and maintaining the role of CESR/ESMA in considering the use of the waivers to ensure their consistent and reasonable use. Taking the feedback from the consultation into account, CESR proposes that the discretion of Member States to choose some of the criteria to define liquid shares and the existing discretion regarding requirements for admission of units in collective investment undertakings to trading on an RM is retained. However, CESR sees merit in converting the discretion of Member States under Article 22(2) of MiFID into a rule by prescribing that investment firms comply with their obligation to make an unexecuted client limit order immediately public by transmitting it to a pre-trade transparent RM/MTF.
Tackling market micro-structural issues
CESR sets out the key themes emerging from its Call for Evidence on micro-structural issues of the European equity markets (Ref. CESR/10-142) and proposes an action plan for further work in this area. CESR also recommends the Commission amend MiFID to include specific references to ESMA competencies to develop binding technical standards on RMs/MTFs‟ organisational requirements regarding sponsored access, co-location, fee structures and tick sizes, as appropriate. Pending the revision of MiFID, CESR will consider dealing with some of these issues under CESR guidelines. CESR will also work further on high frequency trading to better understand any risks that it may pose to the orderly functioning of markets.
CESR‟s technical advice to the Commission on equity markets has been prepared by the Secondary Markets Standing Committee chaired by Sally Dewar, Managing Director (Risk Business Unit) of the UK FSA, who stated:
“CESR proposes important changes to the European regulatory landscape and future ESMA powers aimed at keeping pace with new technological advances, increasingly fragmented equity markets and shortcomings in the quality and consolidation of post-trade information in the European equity markets. The efficient development of a European consolidated tape for shares on the basis of clear rules and a viable economic model involving the industry is amongst one of a number of key proposals which should deliver major transparency benefits.”
© CESR - Committee of European Securities Regulators
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