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UK Lords call MiFID II “rushed”
10 July 2012
A House of Lords sub-committee calls into question the European Commission’s proposals for the MiFID review
House of Lords
The European Commission has not thought through a lot of the proposed changes to the Markets in Financial Instruments Directive (MiFID II or MiFID review), according to a report published today by the House of Lords Economic and Financial Affairs EU Sub-Committee.
Committee chairman Lord Harrison said that MiFID II has been brought forward with “undue haste”, is “ill-thought-out” and could be “hugely damaging” for the City of London and the EU financial sector.
He said that while a review of MiFID was necessary, “we simply can’t risk locking third country firms out of EU financial markets or damaging the provision of investment services”.
The report pointed out three key areas, including proposals on third country access which it said would create a “fortress Europe” where countries such as the USA and China would be forced out to the detriment of EU consumers.
The sub-committee also said the current proposals include an “unsophisticated, one-size-fits-all approach” which it said ignores the sensitivity of information before a trade is made and risks damaging liquidity, competition and market innovation. The new category of Organised Trading Facilities (OTFs) was also called into question in the report.
The report comes just days after the European Securities and Markets Authority (Esma) published two final sets of MiFID guidelines.