Mifid II review could lead to unexpected changes says former MEP
A key contributor to the European Mifid II financial regulations today warned that plans for reforms of the rules could lead to unexpected consequences.
The European Commission today launched a consultation on changes to the Mifid II rules, with possible changes including the establishment of a single record of trading data from the separate national exchanges and trading venues, known as a consolidated tape.
Kay Swinburne, a former Conservative member of the European Parliament and now vice chair of financial services at KPMG, said: “The Commission’s intention is to review specific parts of Mifid II – including establishing a consolidated tape, which is welcome – but once the file is open to co-legislators it will be hard to limit the changes.”
Swinburne said that without the UK’s input into the reforms, the rules may become more restrictive.
“Without the UK at the table, points relating to non-discriminatory access could be at risk, such as open access on trading venues and CCPs [central counterparties]. The UK argued for open and competitive access but some other member states were not in favour. In my opinion, the high cost of post-trade services in the EU, which are ultimately borne by the end investor, won’t go down if competition is not facilitated by enabling choice.”
Consolidated tape has been a longstanding goal for investors in Europe which has about 20 trading venues.
Asset managers and banks need price data to prove to regulators they are offering clients the best deals.
“A European consolidated tape could be one major step towards ‘democratising’ access to ‘market data’ so that all investors can see what the best price is to buy or sell a particular share,” the Commission said.
The Commission said that its other priorities in the Mifid II review are changes to rules on investor protection, the review of regulations on unbundling research and other financial services.
The consultation on the changes is open until 20 April.