Eumedion submits suggestions for amendments on MiFID II and MiFIR proposals
16-04-2012
Eumedion is concerned that some of the proposals for a regulation and a directive on markets in financial instruments ('MIFID II and MiFIR') will seriously harm long term institutional investors' interest and their returns to European citizens as being pensioners, policy holders and savers. Eumedion writes this in a today's sent letter to the European Parliament. Eumedion hopes that the suggestions for amendments will be taken into account in the negotiating process between the European Commission, the European Council and the European Parliament.
The emphasis in the MiFID review debate has predominantly been on moving all kind of trading activities to regulated markets and others trading venues and, thereby, pampering the commercial interests of their operators. So far the interests of long term institutional investors and European citizens on whose behalf they trade have drawn much less attention. This is a serious flaw, as it is this long term focused ‘buy side’ which is crucial to strengthen en re-establish the connection between the financial markets and the overall economic and social environment.
Eumedion is cautious that the adoption of some the Commission’s proposals as well as some of MEP Ferber’s proposed amendments will:
- result in a steep increase of long term institutional investors’ trading costs, ultimately at the expense of European citizens;
- lead to seriously limited opportunities for long term institutional investors to trade large in scale and illiquid orders; and
- neither contribute to financial market stability and efficiency nor to the overall economic environment.
Specific comments have been submitted on the draft corporate governance provisions, algorithmic and high frequency trading, organised trading facilities, systemic internalisers, OTC derivatives, pre-trade transparency and post-trade transparency.