GFS LinkedIn
GFS Facebook
GFS Twitter
GFS RSS feed

Mixed reactions to Mifid review

Tuesday 13 July 2010 - by Luke Nelson

CESR’s consultation on the Mifid review has been greeted by a mixture of responses from stakeholders with a resounding lack of support for increasing pre-trade transparency in non equity markets

As the Commission makes its considerations ahead of the Mifid review, now expected in the first quarter of 2011, it will look to the Committee of European Securities Regulators to provide guidance after consulting with the industry.

In both secondary and non-equity markets much of the debate has focused on possible changes to transparency regimes and the potential impact on liquidity.

The responses to CESR consultations point to cautious support of increased post-trade transparency in non-equity markets, and a welcoming of a three-pronged approach to improve consistency of standards in post-trade transparency in the equities market.

There is a resounding lack of support for increasing pre-trade transparency in corporate bonds, structured finance, credit default swaps and derivatives markets, with most respondents suggesting liquidity would be impinged.

However, a shift from a principles-based approach to a rules-based approach in regard to the waivers currently in place for pre-transparency in the equities space is well received.


The general consensus from respondents to the consultation on non-equity markets transparency is that an increase in post-trade transparency would be welcome. On the whole there was a lack of support for any pre-trade transparency regime.

The International Capital Market Association says its members fully support greater transparency of post-trade data to regulators – including all transaction size, data and time data. However, it also says that there is genuine concern among members that publication of post-trade data to the market as a whole will negatively impact on liquidity.

The European Banking Federation is slightly more favourable to the prospect of a post-trade transparency regime for products with “a sufficient degree of liquidity”, although it also states that such a regime must be thoroughly designed to avoid negative effects on market liquidity.

Opposition to a pre-trade transparency was greater than support for any increase in post-trade transparency throughout the responses.


Article pages: |   1  |  2  |  3  |



WHAT DO YOU THINK?
 
Name:
   
Email:
   
Comment:
   
Post as Anonymous
  Display name
   
Please, enter security code
   
 

No comments yet.

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

Yes

No

Don't know

View results

FIND A REGION world regions