European Commission Consults on MiFID II

The European Commission has launched a consultation on reviewing the EU Markets in Financial Instruments package. The Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation have applied across the EU since January 1, 2018 and regulate the functioning and transparency of EU financial markets. The consultation closes on May 18, 2020. The Commission is due to publish a legislative proposal to amend MiFID II and MiFIR in Q4 2020.

The consultation proposals take account of engagement with stakeholders and recent consultations and technical advice published by the European Securities and Markets Authority, including ESMA's December 2019 report on the development in prices for pre-trade and post-trade data and on the consolidated tape for equity instruments and its May 2019 consultation on the MiFID II position limits regime for commodity derivatives. The Commission was also prompted to consider investor protection rules by the Council of the European Union's conclusions on the Deepening of the Capital Markets Union.  

The priority areas for review are:
 

1. Establishment of a EU consolidated tape for financial instruments;
2. Investor protection, including client categorization, product governance, provision of investment services via telephone and reporting on the quality of execution of transactions;
3. Research unbundling rules and SME research coverage; and
4. Commodity markets, in particular the position limits regime, with the purpose of fostering more Euro-denominated commodity derivatives trading.

The areas that are not so prioritized but which are still included specifically within the review are:
 

1. The functioning of the derivatives trading obligation, its scope and access to trading venues;
2. The scope of multilateral trading venues that are subject to the MiFID II package;
3. The impact of the Double Volume Cap on transparency in share trading;
4. The operational and technical challenges raised by the open access provisions for exchanges, clearing houses and others;
5. Market developments relating to digitalization and new technologies; and
6. Whether spot FX contracts should be classified as financial instruments and brought within scope of the MIFID II package.

View the Commission's MiFID 2.1 review consultation paper.

View the Commission's impact assessment.

View ESMA's report on prices for market data and the consolidated tape.

View ESMA's consultation on pre- and post-trade transparency data and the functioning of the consolidated tape for equity
instruments.

View the Council of the European Union's Conclusions on the Deepening of the Capital Market's Union.

View ESMA's call for evidence on the MiFID II position limits regime for commodity derivatives.

View ESMA's consultation on revisions to the legal framework for position limits and position management in commodity derivatives.

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