ISDA has commented on the first compromise text on MiFID and MiFIR (see FReD 29 June). It welcomes some developments, but wants further improvements in other areas. It is pleased with:

  • the moves recognising the need for an appropriate balance between liquidity and transparency in non-equities markets;
  • the streamlining of the pre-trade transparency waiver process;
  • the attempts to align the systematic internaliser regime with the approach to trading venues; and
  • the increased commercial policy provisions in line with the approach to the equities regime.
  • It is still concerned about:
  • the derivatives trading obligation, where it wants an explicit block trade exemption above which the trading obligation would not apply;
  • the current requirement for venues to make indicative prices in every available contract which it says is neither feasible nor helpful to investors, given the sheer breadth of non-equity instruments;
  • the continued failure to address the problem that the proposed ban on the use of proprietary capital by Organised Trading Facility (OTF) operators will cause.

(Source: ISDA comments on MiFID Compromise)