Will the Markets in Financial Instruments Directive (MiFID) soap opera ever end? We are getting perilously close to another series – starting at the end of 2014 and one that might even run into 2016.
The Committee of European Securities Regulators, predecessor to the European Securities and Markets Authority (ESMA), started consulting on the MiFID review in 2010. At the heart of the lack of progress are the talks on “high-speed trading”, and all its machinations via “dark pools”. These featured in the first consultation, then at the initial hearings of the Economic and Monetary Affairs Committee (ECON), and were a prime factor in delaying the publication of the formal European Commission proposal until October 2011.
In 2012, the European Parliament tightened up the Commission’s proposal on high-frequency algorithmic trading. In June 2013, the Irish presidency of the Council of the EU finally clinched a deal between the Members States. This was one of the main achievements of its presidency. The council’s negotiating position included:
enhanced transparency: member states have decided to limit “dark pool” trading and introduce a new trade transparency regime for non-equities markets;
more robust and efficient market structures with the introduction of a new type of trading venue, the Organised Trading Facility (OTF);
new safeguards to take account of technological developments such as algorithmic trading or high-speed trading.
A vote is scheduled for the parliament’s plenary session in December but there is a risk that the trialogue negotiations (between the parliament, Member States and the Commission) will not be concluded in time. The parliament’s final plenary session will be in mid-April, 2014, leaving very little time before parliamentary elections.
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