20 January 2020

European Forum of Securities Associations paper calls for recalibration of MiFID 2/R

Ahead of the European Commission’s MiFID2/R Review, EFSA published a paper calling for certain areas of regulation to be recalibrated in order to deliver its intended policy outcome of establishing a more transparent financial system that works to the benefit of the economy and society as a whole.

MiFID 2/R, in conjunction with Level 2 and Level 3, forms the cornerstone of financial regulation for securities markets in the EU. However, there are some areas of MiFID2/R which need recalibration in order to deliver on the regulation’s original aims and to avoid unintended harm to the market, liquidity and investor choice.

The paper highlights a number of issues which EFSA members believe should be a priority in the context of a review. Areas where amendments and further review are needed include:

• Market structure
• Transparency and data quality
• Market data costs
• Cost and charges
• Product governance
• Best execution reporting
• Research

It is of utmost importance that a MiFID 2/R review is evidence-based and that any proposals for amendments to level 1 and 2 are developed in order to (i) deliver good outcomes for investors (investing both directly and indirectly), (ii) to improve the competitiveness of the EU financial sector, (iii) to ensure together with the Capital Markets Union reform (CMU) that EU markets are able to finance the EU economy, (iv) to introduce more proportionality and to better reflect the specificities of the wholesale market, and (v) to ensure that investment firms of all sizes are able to provide services for the benefit of all kinds of issuers or investors. Moreover, all amendments should be made subject to rigorous consultations with stakeholders.

Full paper

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