Verena Ross, Executive Director of ESMA, delivered a keynote speech to the ABA/Law Society Capital Markets Conference in London this morning. Her speech focused on MiFID II and in particular its implications for transparency and liquidity.
Selected extracts:
On transparency – “When developing technical standards and advice ESMA needs therefore to ensure that pre- and post-trade transparency for equity, equity-like and non-equity instruments is increased, in particular for those instruments, such as derivatives, that are still far from being traded in a fully transparent market. There are endless debates about the relation between transparency and liquidity and whether there is a trade-off between them. We tend to see the MiFID II mandate as one aimed at increasing transparency in a manner that does not “damage”, but instead improves, the functioning of the market.”
On liquidity – “We are aware of the significant impact that our future regulatory work under MiFID II may have on liquidity within EU financial markets. This is not a completely new element of our work. We already monitor and assess securities markets in order to identify trends, potential risks and vulnerabilities and report comprehensively on these issues on a regular basis. In doing so we pay particular attention to liquidity risk, as this can easily be altered by drivers such as financial innovation, prudential regulation, the interest rate environment, regulatory standards and the business cycle to name just a few.”
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Verena Ross, Executive Director ESMA, Delivers Keynote Speech On MiFID To ABA/Law Society Conference In London
Date 26/02/2015