The revised Markets in Financial Instruments Directive, the EU legislation on financial markets known as Mifid II, will make legitimate hedging more expensive and impact on liquidity levels consultancy group GreySpark Partners has warned.
In October, the European Commission is expected to
publish the proposed legislation for Mifid II, which is
designed to promote transparency and harmonise regulations
across trading facilities.
The report by GreySpark warned against Mifid II
adopting a universal approach for market segments and called on
legislators to introduce rules concerning pre and post trade
transparency as well as the push to exchange trading for some
instruments in phases across asset classes.
Fred Ponzo, managing partner at GreySpark, said:
Mifid II is wide in scope and has a lack of precision in
areas such as the treatment of commodity derivatives. It is
clear that some of the proposals are there to appease the
Despite this, the GreySpark report said that it was
unlikely that some of the more controversial aspects of Mifid
II will be published in the draft due out this autumn.
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