Article reports that the industry is developing measures for the internalisation of the renminbi, including the London Bond Connect, in order to allow infrastructures to match international capital with Chinese sovereign and corporate debt markets, according to Alex McDonald, CEO of the European Venues and Intermediaries Association (EVIA), who was responding to the statement that China is willing to open its economy before US trade talks begin.
i. MiFID II Summary; Outstanding Issues and Topics in MiFID2
iii. Specific Comments
iv. Conclusion: proposed changes for a MiFID Review and/or MiFID3
v. Annex 1: Note to the Finance Ministry; Comments specific to German participation in MiFID; participation and products
vi. Annex 2: General Comments on Gaining Permissions and Operating Trading Venues
Article reports that EVIA has urged policymakers to revisit open access rules to central counterparties (CCPs) after many countries chose to opt out for this element of MiFID II for a thirty-month delay. The response from the Association to the German Ministry of Finance consultation on Mifid II implementation is that the lack of open access has led exchanges to increase the prices for market data at will. Overall, EVIA argues that open access would preserve lower data costs and mitigate risks. Further insights include removing certain non-investment products from Mifid, consistent interpretations across regulators and simplification of execution reports.
Article reports that there is a need for increased harmonisation of regulatory interpretations across financial markets, according to EVIA in their response to the German Finance Ministry’s recent request for feedback on MiFID II and MiFIR. Despite praising the benefits of MiFID II regulation on transparency and conduct, EVIA has requested a clarification of the approach to third country access and equivalence as well as on open access to market infrastructures. It also mentioned that regulators should improve measures that help lower data costs and work to redefine financial instruments, particularly derivatives. Finally, it noted that non-investment products should be excluded under MiFID II’s scope and has requested easier data captures, simplified execution reports and a coordinated homogenous supervision from regulators.
Article reports that EVIA’s response to Germany’s Finance Ministry request for feedback on MiFID II and MiFIR featured a call for the rules to change so that foreign exchange swaps are no longer included within their scope, while the association also acknowledged that MiFID II’s implementation provides several advantages, such as standardisation and transparency. In addition, EVIA concludes that the economic charges imposed by market monopolies has been the most harmful outcome. With regards to FX instruments, the article notes that EVIA called for a re-definition of what should be considered a financial instrument. Finally, EVIA urged for a simplification on execution reports and a review on ‘best execution’ practices.
Article reports that lobbyists for European exchanges are calling on EU officials to reverse the open access rule within MiFID II, a rule that allows derivatives to be traded on one exchange and cleared at another, as they feel it is unsuitable in a post-Brexit environment, however lobby groups for brokers including BGC Partners and TP ICAP are supporting the rule in order to break up the monopoly held by the exchanges and to mitigate the risks presented by closed market infrastructures.
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