The European Parliament today voted to approve the latest and long-awaited amendments to MiFID II – but industry associations are calling for more.
Following a plenary debate on Monday, Parliament today passed the proposed rules agreed in June 2023 to enhance market data transparency, optimise orderly trading and prohibit receiving payments for forwarding client orders.
It comes as a positive step forward, but some players are calling for further and faster action, in particular regarding the prioritisation of equity and fixed income consolidated tapes.
Although there is a requirement for ESMA to assess the effectiveness of the consolidated tape for equities by no later than 30 June 2026, including the appropriateness of adding additional pre-trade data, industry associations including the Association for Financial Markets in Europe (AFME) have urged that the tape take greater priority. Specificially, the group suggests that the equity pre-trade tape should be expanded to include five levels of depth of the order book, in order to give subscribers the most value and ensure commercial viability.
“As the 2019-2024 EU legislative cycle concludes, new and pressing challenges have emerged including strained public finances, demographic shifts and an estimated annual transition investment of EUR 700 billion. This context underscores the importance of developing open, deep, and integrated capital markets to support EU corporates and citizens,” said AFME CEO Adam Farkas in a statement today.
“Despite efforts under the EU’s Capital Markets Union (CMU) Action Plans, EU capital markets remain underdeveloped in comparison to the size of the EU economy and the EU’s global counterparts. Financial integration is lower than before the financial crisis, EU bond and securitisation markets are three times smaller than in the US, EU equity issuance remains heavily subdued, and the overall availability of risk capital is around 10 times lower than in the US.
“Looking ahead, EU institutions and Member States must come up with transformative actions to attract more investors, increase liquidity, improve the functioning of secondary markets, ensuring the seamless and integrated functioning of a single European capital market. Dynamic, deep and liquid, capital markets are instrumental in achieving Europe’s ambitions in delivering green and digital transitions.”
The UK is also proceeding with its plans for a consolidated tape, and earlier this month outlined plans for both an equity and bond offering – with a bond tape expected to launch in the second half of 2025.
Speaking to BEST EXECUTION, Eglantine Desautel, CEO of EuroCTP, said: “EuroCTP welcomes the European Parliament’s adoption of the revised Markets in Financial Instruments Regulation (MIFIR) and the Second Markets in Financial Instruments Directive (MiFID II). This marks a great start of the year. At EuroCTP, we stand by the shared principle of increasing market data transparency and accessibility.”
“We are ready to do our part to foster the Capital Markets Union by providing an Equities and ETFs consolidated tape in the EU, for the benefit of all investors. While ESMA defines the technical standards, EuroCTP is actively engaging with all stakeholders and future users of the consolidated tape to make sure that our functional, technical, and commercial offering match their needs while complying with regulation,” Desautel added.
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