On 19 May 2020, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) answered European consultation on MiFIR / MiFID II.
18 Jun 2020
European rules on financial markets and investment must better protect investors and make financial markets more transparent. However, this goal is not yet achieved in all parts of the Markets in Financial Instruments Directive (Mifid II).
A number of issues related to investor protection (such as cost transparency, 'product governance' and distribution fees) and market infrastructure (such as 'consolidated tape') require adjustments.
The Dutch Banking Association (NVB) underlines this issue in response to a consultation in which the overall functioning of the financial regulatory framework for the functioning and transparency of financial markets (MiFIR / MiFIDII).
The benefits of MiFID II are rather limited, but costs have increased resulting in a negative cost-benefit balance. This is partly due to:
- the ambiguous and multi-interpretable nature of the MiFIR/MiFID II legislative texts
- timing issues.
For example, in the initial phase of MiFID II guidance was urgently sought after. When level 2 and level 3 guidance were published, it was effectively too late as financial market participants already interpreted and implemented MiFID II based on level 1 texts. Due to the different interpretations across Member States, ESMA’s level 2 and level 3 guidance caused further confusion and additional burdens as key concepts were not clearly defined. In the upcoming review definitions and timelines should be better aligned.
This article was originally published in the May edition of REGWATCH. Read the full edition covering the following jurisdictions:
- European Union
- Hong Kong
- United Kingdom