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MiFID (the Markets in Financial Instruments Directive) is up for review by the European Commission this year and in the run up to it the Committee of European Securities Regulators (CESR) has issued three consultation papers on technical advice to provide to the Commission before the official review begins.

The three consultation papers identify areas within MiFID’s framework where there is a need for improvement and asks for stakeholder’s feedback on what policy options CESR should suggest to the Commission:

Consultation on investor protection and intermediaries:

This paper examines issues such as execution quality data, complex vs. non-complex financial instruments, and the definition of personal recommendation.

Consultation on equity markets:

This paper examines issues such as retaining the pre-trade transparency regime for organised markets, improving the post-trade transparency regime, and reconsidering the regulatory framework for the consolidation and cost of market data.

Consultation on transaction reporting:

This paper examines issues such as introducing a third trading capacity (riskless principal) and extending the transaction reporting obligation to all market members, whether they are investment firms or not.

There has been talk amongst industry professionals that the MiFID review could result in a complete overhaul of the current regime with the introduction of new regulation, dubbed ‘MiFID II’, to try to fix some of these unintended consequences of MiFID, which came into effect in November 2007.

We will be forming a working group, made of representatives from our technical committees, to examine the policy options proposed and respond to the consultations.

To access these consultations, please visit CESR's website.

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