The group, which held its first meeting in early February, comprises executives from Barings, Axa Investment Managers,Deutsche Bank, Bank of America Merrill Lynch,Morgan Stanley, Nasdaq OMX and Six Swiss Exchange. It will deal with issues relating to the Markets in Financial Instruments Directive II, according to a person close to the discussions.
Following a long-awaited agreement among EU regulators on the new rules in MiFID II, the market is now waiting for a final text to emerge, after which the European Securities and Markets Authority will begin consulting with the market on how a number of the new rules should be designed and implemented. The introduction of the new rules is expected to begin during 2016.
The aim of the group will be to jointly respond to the ESMA consultation in areas where there is broad agreement between the three types of market participant. The response would then be delivered to Esma via a neutral trade association, such as the Fix Trading Community, the body responsible for administering messaging standards for trading and markets. Earlier this month, Fix took control of an industry-led initiative created to improve the quality of market data in Europe ahead of the introduction of MiFID II.
The technical detail on over 80 aspects of the MiFID II rules, such as how dark pool limits are enforced and the metrics used to monitor electronic trading will be decided by Esma.
During negotiations between EU policymakers on the Directive, which lasted three-and-a-half years, relations between different industry participants suffered after disagreements on a number of key issues, such as the level of trading done off-exchange and the risks associated with competition among futures markets and clearing houses.
There were signs of greater cooperation, however, when the a number of firms including the London Stock Exchange, the Association for Financial Markets in Europe and fund managers BlackRock and Fidelity sent a letter to EU legislators in a last-ditch attempt to influence some of the MiFID II rules.
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Further details: Council agreement with EP
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