Brussels is preparing to retune some of its Mifid II markets rules from next year, less than three years after implementation, following a wave of criticism from investors and regulators over the effectiveness of the far-reaching legislation.
Policymakers at the European Commission, the executive arm of the EU, are examining targeted technical changes on issues such as the cost and distribution of market data, investor protection rules and research for small companies.
Its move comes in response to continued criticism of the vast Mifid legislation, which contains more than 1.7m paragraphs of text and took seven years to come into effect. It was designed to offer more protections for investors, and greater transparency and competition in Europe’s biggest capital markets.
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Officials are meeting stakeholders to discuss changes to Mifid II on some specific issues, according to five people who have been involved in discussions with Brussels.
It is not unusual for Brussels to amend financial services rules if they cause unintended problems; in recent years policymakers have reworked laws for bankers’ bonuses and securitisation. But the huge size and scope of Mifid II have struck a nerve with thousands of asset managers and bankers, who have complained that it has raised costs but produced few of the intended benefits for consumers. Some fear it even harms Europe’s investment banking industry, effectively handing parts of it over to US banks.
“Overall, the Mifid II rules impose too much bureaucracy on investors and banks alike,” said Henning Bergmann, chief executive of DDV, the German derivatives association.
