Mifid III may be introduced before Mifid II says EU

The European Parliament is seeking to fast track theimplementation of the third Markets in Financial Instruments Directive (MifidIII) as it seeks to remedy potential market disruption from the introduction ofMifid II.

Mifid II is expected to be introduced in January 2018 following ayear’s delay from its original implementation date.

However, sources close to European policy makers said thatthere were so many outstanding problems with the legislation that anotherupdate was essential and a target date of December 2017 has been set for theintroduction of Mifid III.

Totali Buffooni, a spokesperson for the European Parliament,said: “It’s fairly obvious that we got most parts of Mifid II wrong so we areseeking to rectify that with Mifid III, ideally coming into force before theimplementation of Mifid II.”

Proposals for Mifid III include the creation of new, phonebased, bilateral trading methods, which have provisionally been termed “OTC”trades and the reforms overall will seek to “encourage rather than eviscerateliquidity” in derivatives markets.

“Many people here have realised since the discussions overMifid II that there is actually some benefit in having capital markets inEurope and that the original proposals to completely eradicate trading mighthave over-stepped the mark,” said Buffooni.

“It is also apparent that imposing capital charges ofhundreds of millions of euros on individual proprietary traders might be erringtoo much on the side of caution.”

Buffooni allayed fears that the market would not be readyfor Mifid III. “We are looking at a couple of sides of A4 for this rather than thethousands of pages in Mifid II. It’s very much an ‘as you were’ kind of thingrather than a radical reform.”