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CFA Institute, EuroInvestors and FESE welcome the publication by the European Commission of the proposal for amending the Markets in Financial Instruments Directive (MiFID). Together, these associations represent over 100,000 investment professionals, 4 million retail investors, 9,077 listed companies and the 46 regulated exchanges that form the bridge between them. These associations jointly call on the EU Institutions to ensure that the MiFID Review achieves what should be its primary objective: making the capital markets work for Europe’s real economy and society as a whole. Its end result should be a regulatory framework that supports capital formation for EU enterprise and the creation of new wealth for the citizens of Europe.
The fundamental economic purpose of the capital markets is to connect end‐investors and issuers of capital directly. Market regulation should permit investors to make well‐informed decisions and provide issuers with lower capital costs. The financial crisis has shown that regulated public markets,which provide transparency, fair prices, open and free access to the investors and market surveillance, are the best safeguard of investor interests and also ensure robust, liquid, and efficient markets.
Specifically, we ask that the MiFID Review be oriented towards the following principles:
- Promoting the transparency and consolidation of trade data for all financial instruments;
- Maintaining and enhancing market credibility, openness, and investor confidence;
- Ensuring a level playing field in trade execution for all market participants;
- Improving direct access of individual investors to capital markets by reducing the overall complexity and costs of investing; improving the integrity, reliability and quality of the data they need to evaluate alternative investment opportunities; enforcing the existing rules requiring fair investor information and disclosure of conflicts of interests; ensuring that sales processes are presented to investors in a fair way and distinguished from unbiased advice; and extending investor protections to all “substitute” retail investment products;
- Ensuring consistency with other legislation aimed at promoting relevant and appropriate issuer information which balances the diverse needs of companies at different stages of growth with the information needs of investors, with particular attention to the needs of Europe’s smaller companies.
Now that the European Commission has finalised its proposal to address the key challenges ahead of us, the European Parliament and the Member States will have an important role in bringing this important work to a satisfactory conclusion. We look forward to working with the co‐legislators to ensure that the proposal serves the interests of Europe’s investors and companies in the long term.
