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Yesterday, the European Parliament in plenary adopted the Commission’s proposal of the review of the Markets in Financial Instruments Directive (MiFID II). The Federation of European Securities Exchanges (FESE) welcomes the agreement of European policy makers on MiFID II Level 1 text. This directive, which was initially adopted in 2004, changed Europe’s trading landscape by increasing the competition between equities trading venues, but also led to increased market fragmentation and complexity for investors and companies.
Christian Katz, President of FESE, said: “I welcome today’s plenary vote by the European Parliament on this important directive’s review which has managed to find a balanced agreement that will help bolster investor confidence in our markets. As FESE, we will cooperate with issuers and market participants alike to implement the envisaged market improvements”.
FESE highlights the importance of the following positive achievements, which should bring more efficient, resilient and transparent financial markets in Europe:
- Stronger investor protection through a more robust, transparent and efficient market structure.
- A framework for the implementation of the G20 trading mandate in respect of derivatives.
- A strengthened transparency regime for equities that is flexible enough to protect investors from market impact.
- An adequate framework for technological innovations in the field of high-frequency trading.
- An increased ability for SMEs to raise capital in the EU through a specific SME markets’ label.
At the same time, FESE strongly welcomed the European Commission’s ambition to extend appropriate and calibrated transparency to bonds and derivatives. FESE will continue to support all initiatives to ensure these ambitions are realised at the next level of rule definition, either within Level 2 or beyond.
Judith Hardt, Director General of FESE, said: “I would like to congratulate the European co-legislators for their excellent work and the determination they have demonstrated in dealing with equities market structure and the fragmented liquidity flow. We urge ESMA to live up to the Level 1 ambition with regard to the implementation of the trading mandates and the establishment of an appropriately calibrated transparency regime for all asset classes. We look forward to continuing our engagement with regulators and all stakeholders at Level 2”.
