ESMA Regulation - Consultation Paper - MiFID II/MiFIR - May 22, 2014

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Timeline, MiFID II
MiFID Effective MiFID II/MiFIR Proposal Entered into Force Rules Applicable
November 1, 2007 October 20, 2011 July 2, 2014 January 2017

On May 22nd, 2014 The European Securities and Markets Authority (ESMA) published its consultation paper on MiFID II/MiFIR. The MiFID II/MiFIR legislative package passed in the European Parliament on May 15th, 2014. These reforms seek to increase market transparency and stability.


Background

The MiFID II/MiFIR reforms passed the European Parliament in 2014. This legislative package required ESMA to develop rules and guidelines on various aspects of the market. A study commissioned by the European Commission identified seven problem areas:

  • Lack of level playing field between markets and market participants, in light of industry changes including the rise of high-frequency trading and over-the-counter (OTC) derivatives;
  • Difficulties for Small and Medium Enterprises (SMEs) to access financial markets
  • Lack of transparency for market participants, given the increased use of dark pools;
  • Lack of transparency for regulators and insufficient supervisory powers in key areas;
  • Insufficient investor protection in such areas as mis-selling to clients and trade execution quality;
  • Weaknesses in some areas of the organization, processes, risk controls and assessment of market participants; and
  • Obstacles to competition in clearing infrastructures.

These reforms seek to remedy these issues as well promote financial stability

Summary of the Consultation Paper

The 311 page document consists of 8 Sections.

  • Section 1, Overview :
  • Section 2, Investor Protection:
  • Section 3, Transparency:
  • Section 4, Data Publication:
  • Section 5, Micro-Structural Issues:
  • Section 6, Requirements Applying on and to Trading Venues:
  • Section 7, Commodity Derivatives :
  • Section 8, Portfolio Compression :


ESMA accepted comments on the consultation paper until July 10, 2014. To see comments press here


References

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