Europe’s pan-financial regulator European Securities and Markets Authority (ESMA) has launched its consultation process for the implementation of the revised Markets in Financial Instruments Directive (or MiFID II) This marks the first step in the process of translating MiFID II requirements into practically applicable rules and regulations – primarily aimed at improving financial market transparency and strengthening investor protection.
MiFID II introduces changes that will have a large impact on the EU’s financial markets, including the online trading sector and all those who offer trading in derivative instruments. These changes include:
- transparency requirements for a broader range of asset classes,
- the obligation to trade derivatives on-exchange,
- requirements for algorithmic trading,
- requirements for high-frequency-trading, and
- new supervisory tools for commodity derivatives.
ESMA Chairman Steven Maijoor stated:
“The launch of today’s MiFID II/MiFIR consultation process is an important step in the biggest overhaul of financial markets regulation in the EU for a decade. The reform of MiFID is an integral part of the EU’s strategy to address the effects of the financial crisis and aims to bring greater transparency to markets and to strengthen investor protection. These changes are key to restoring trust in our financial markets.
“We appreciate the magnitude of this exercise for stakeholders. We strongly encourage all those affected by these reforms to provide their views to ensure that we take them into account in our final proposals.”
The papers released today by ESMA for consultation include:
1. Consultation Paper on MiFID/MiFIR Technical Advice. ESMA needs to deliver this advice to the European Commission by December 2014 and is therefore subject to a condensed consultation
process for this paper; and
2. Discussion Paper on MiFID/MiFIR draft RTS/ITS. This will provide the basis for a further consultation paper on the draft RTS/ITS which is expected to be issued in late 2014/early 2015.
The closing date for responses to both papers is Friday 1 August.