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20 October 2011

ECR: EU's MiFID and MAD proposals are good place to start


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欧州議会のスインバーン議員はこうした提案によってEU(欧州連合)全体が英国の基準に近づくとして支持する一方、ESMA(欧州証券市場機構)もしくはEUが、各国の当局が管轄すべき刑事捜査や訴訟を行う権限を要求する可能性があることを懸念している。


Long-awaited proposals from the European Commission that review the Markets in Financial Instruments Directive (MiFID) are not perfect but provide a good place to start, Dr Kay Swinburne MEP, European Conservatives and Reformists group economics spokesman, said today.

The original 2004 Directive was one of the most significant pieces of EU legislation aimed at ensuring competition and consumer protection in the financial services sector. The new rules are intended to bring the Directive up-to-date with new technologies, high-frequency trading and the emergence of new trading platforms. They also aim to increase transparency and better regulate commodity and derivatives markets; and they propose beefing up the role of the European Securities Markets Authority (ESMA) in ensuring the rule book is enforced.

Alongside these proposals, the Commission is also proposing a review of the Market Abuse Directive (MAD) to prevent market manipulation and insider trading. Dr Swinburne is generally supportive of these proposals which should bring the rest of the EU up to UK standards, but she is concerned that ESMA or the EU may demand powers to carry out criminal investigations and prosecutions that should remain the prerogative of national regulators and enforcers.

Dr Swinburne recently drafted a report in the European Parliament looking at regulation of trading in financial instruments such as 'dark pools', much of which has been taken onboard by the Commission in its MiFID proposal.

She said: "Businesses need capital, and creating a genuine single rulebook should help with the process of raising it. This legislation must be designed to ensure the best possible deal for investors.

"The Commission has given us a good starting point but the proposals are not perfect.

"The review of the equity markets provisions should address the concerns investors have that technology is outpacing regulation. The proposals on fixed income and other asset classes could really shake up the bond markets so we must tread carefully so as not to cause a loss of liquidity at this crucial time.

"However, I am concerned that the proposals regarding commodity derivatives are currently a blunt instrument rather than the scalpels that national regulators will need to manage position limits.

"I also feel that some of ESMA's new powers go too far so that it becomes the policeman of the rulebook rather than the guardian of it. We must ensure that it is not given discretionary powers over individual firms.

"High frequency trading is an area that needs new regulation but I am concerned that we are being premature and heavy-handed with these proposals. Data in this area is still being gathered and we should wait for the hard facts so that we can legislate proportionately and without causing dire unintended consequences."

Regarding the MAD review, Dr Swinburne said: "It is right that we are introducing common definitions of market abuse, market manipulation and insider trading at an EU level, and that we are clamping down on those who have 'intent' to manipulate the market. In the UK we already have strong standards in this area and much of this work will involve bringing the rest of the EU up to the UK's level.

"Of course we must have robust criminal sanctions in place for market abuse, but these should be set and enforced by national authorities, not by EU authorities. This must not become an excuse for the creation of an EU equivalent of the US Securities and Exchange Commission."

Press release



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