On 26 March 2013, a House of Lords debate will be held on the European Union Committee report, MiFID II: Getting it Right for the City and the EU Financial Services Industry, published in June 2012.
The European Commission has brought forward proposals to reform the Markets in Financial Instruments Directive, which aimed to increase the competitiveness of EU financial markets and to facilitate competititon between traditional exchanges and alternative venues. The Commission’s proposals, known as MiFID II, are a complex and significant legislative package that seeks to regulate hitherto less regulated markets in line with G20 commitments.
The Committee found that, whilst a review of the legislation was necessary, the proposal contains fundamental flaws which need to be corrected as a matter of urgency if serious damage to the EU financial services industry is to be avoided. The Committee were particularly concerned at the damage that could be caused by the ill-conceived third country access provisions, and warned against adopting a one-size-fits-all approach to pre-trade transparency that did not take account of the markedly different characteristics of financial markets. All of these issues could have serious implications, not least for the City of London.