The European Commission’s (EC) proposal for MiFID II was launched on 20 October, with a dramatic overhaul of the directive aimed at increasing transparency and competition in the derivatives markets. However trade bodies have already raised concerns that the new rules are too restrictive.
Michel Barnier, the European Union’s (EU)
internal markets commissioner, said: "The
crisis serves as a grim reminder of how complex and opaque some
financial activities and products have become" and
asserted that the joint directive and regulation would
"end the reign of the OTC transactions".
Thanks to widespread leaking of early drafts, the contents
were not a complete surprise, but still Mifid has come a long
way since it was launched in November 2007. The new version
includes a directive and a regulation (the Markets in Financial
Instruments Regulation or Mifir), the latter being necessary,
the EC said "to minimise, where appropriate, discretions
available to Member States across EU financial services
The regulation provides tough new rules for the derivatives
markets. Transparency rules have been extended to derivative
instruments, so that a multilateral trading facility (MTF) or
organised trading facility (OTF), a new hold-all category that
is designed to capture currently unregulated markets (see page
24 for more), have to make the prices and the depth of trading
interests on their markets public on a continuous basis during
normal trading hours.
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