The City of London Corporation published on 23 May 2011 a report, prepared by London Economics, on understanding the impact of the Markets in Financial Instruments Directive (2004/39/EC) (“MiFID”) in the context of global and national regulatory innovations.
The report sets out the findings of a European-wide (excluding the UK) consultation on the impact of MiFID’s pre- and post-trade transparency requirements. It builds on an earlier City of London research report, published in October 2010, outlining the findings of a UK consultation on the same subject.
The aim of the European consultation was to determine whether the views expressed by UK stakeholders can be generalised across the EU or are UK-specific. To enable a comparison, European stakeholders (that is, a sample of brokers, buy-side firms and trading venues) were asked the same questions as their UK counterparts had been asked in 2010.
The report notes that, in general, the responses of the European stakeholders were largely positive and reiterated the views expressed by their UK counterparts in 2010. However, there were some differences in perception regarding pre-trade transparency, including:
- waiver regime;
- price impacts; and
- liquidity impacts.
Following its MIFID review, the European Commission is expected to adopt a legislative proposal (known as “MiFID II”) amending the Level 1 MiFID Directive at the beginning of July 2011.