The House of Lords European Union Select Committee has published correspondence with the UK Government in relation to developments on various EU legislative initiatives. The most recent correspondence covers the following aspects:

  • Council's general approach on the recast Markets in Financial Instruments Directive (MiFID 2) and Regulation (MiFIR): The Government has achieved its preferred outcome of retaining all transparency waivers, enhancing competition through open access to trading venues and central counterparties, and leaving third country firms' access to the Single Market in the hands of individual Member States. The Government also stresses the importance of the new non-discrimination clause that will, for example, prevent any location requirements related to the currency of financial instruments over which services are provided.
  • Council's general approach on the bank Recovery and Resolution Directive (RRD): The Government welcomes the flexibility for resolution authorities to depart from the creditor hierarchy when the bail-in would cause financial instability. It has also ensured that the UK's bank levy can count towards the target level set for the national resolution fund required under RRD.
  • Political agreement between EU Parliament and Council on the Mortgage Credit Directive (MCD): The Government highlights the exemption achieved for buy-to-let mortgage lending. On the other hand, the UK could not block the introduction of a new European Standard Information Sheet (ESIS), but its contents have been brought closer to those of the UK's own current Key Facts Illustration.
  • The Financial Transaction Tax: The Government reiterated its view that a narrower tax, similar to the UK stamp duty, based on the issuance principle and with exemptions to mitigate a cascade effect, would pose fewer risks to the EU growth and the UK financial services sector.
  • Lords report on the impact of the EU Banking Union on the UK financial services industry: The UK Government has kept the Lords up-to-date on the state of play of the Single Supervisory and Resolution Mechanisms (respectively, SSM and SRM). In a letter dated 12 July, the Commission outlined the safeguards, built into the SSM proposals, for the interests of Member States not participating in the SSM.

(Source: Responses and Correspondence with Ministers, Published 26-29 July)