The resolution also sets its sights on the need to reduce over-the-counter (OTC) trading and calls for broker crossing networks (BCNs) to comply with the same rules as other regulated venues.
The non-legislative resolution by Kay Swinburne (ECR, UK) clearly sets out the EP's priorities as the Commission sets about fleshing out its proposal for the review of the Markets in Financial Instruments Directive (MiFID), expected to be published in the spring 2011. The resolution calls for this review arguing that although the directive's goal of reducing transaction costs has been achieved by creating more competition between trading venues, the increase of these venues and the use of the directive's exemptions has led to trades slipping out of sight.
After the vote Dr Swinburne said: "Today the Parliament has clearly shown its concern for the integrity of our financial markets, and is asking the fundamental question: is the market still serving the needs of long term investors and businesses? At the moment, there is a worrying lack of information readily available regarding the over-the-counter space, on broker-operated dark pools and on high frequency trading strategies. The European Parliament is asking for much more information to be made available and collected in a usable form."
"The only way to really understand whether the market is functioning correctly is for regulators to have enough information to see what is going on in the market. When practices like quote stuffing and spoofing are alleged to be taking place alongside supposed barracuda trading strategies which seem to be forcing long term investors into trading within dark pools it suggests that some kind of market dysfunction may be taking place. Hopefully, the Commission and Committee of European Securities Regulators will now use my report to take a long hard look at their reviews of Market Abuse Directive and MiFID and find answers to the questions I have raised."
Next steps
The resolution will now be put before the plenary for a vote in the final week of November. It is expected to feed into the wider debate of the reform of the
MiFID directive, which will see the EP and the Council acting as co-legislators in determining how the whole gamut of trading venues operate. The Commission is expected to publish its proposal in the Spring and subsequently the EP and Council will enter into negotiations to hammer out a deal.
© European Parliament
Documents associated with this article
|
|
INI dark pools.docx
|
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article