July 8, 2020

Volume X, Number 190

July 08, 2020

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July 07, 2020

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July 06, 2020

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European Commission Consults on MiFID II and MiFIR Review

On February 17, the European Commission (EC) launched a public consultation on the review of the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Directive (MiFIR) regulatory framework (together, the Framework).

The EC’s consultation is divided into three sections. In the first section, the EC aims to gather views and feedback from all stakeholders on the experience of the first two years of the Framework. In particular, the EC asks whether “a targeted review . . . with an ambitious timeline would be appropriate to address the most urgent shortcomings.” The EC asks stakeholders to rank their satisfaction with the Framework, and to indicate whether they believe the Framework has succeeded in its objectives.

In the second, much more detailed section, the EC seeks the views of stakeholders in relation to various technical aspects of the current Framework. The aspects designated as “priority areas for review” are:

  • the establishment of an EU consolidated tape (CT), exploring why it hasn’t emerged organically and, if it were to be established, proposals for its features and scope;

  • the impact of the share trading obligation (STO) and potential interaction with the CT;

  • systematic internalizers (SIs), both generally and in relation to the STO and CT;

  • investor protection, including access to simple and transparent products, the relevance and accessibility of adequate information, client profiling and classification, product governance and best execution reporting.

This section also includes a number of more granular proposals, such as the phase out of paper-based information and the creation of a “semi-professional clients” categorization; research unbundling and coverage of small and medium-size enterprises (SMEs); and several proposals to foster more commodity derivatives trading denominated in euros.

The following aspects are designated as “non-priority for the review”:

  • the impact of the derivative trading obligation, the Double Volume Cap (DVC), and the open-access regime;

  • the application of the multilateral system and whether it ensured a “level playing field;”

  • proposals to address digitalization and new technologies, such as adapting the Framework to better suit digital and online offerings; and

  • extending the Framework to cover spot FX contracts.

The third section of the EC’s consultation is a generic catch-all for stakeholders to “draw the attention of the Commission to any further regulatory aspects or identified issues.”

The EC’s consultation is available here and is open until April 20.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 52


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629