ALDE - Alliance of Liberals and Democrats for Euro : MIFiD: Stronger investors’ protection and competition as preconditions for a robust financial market

Tonight, after months of negotiations, the European Parliament and the Council reached an agreement on the revision of the Markets in Financial Instruments Directive (MIFID II). This revision was proposed in 2011 by the Commission to respond to the speed of the market and technological developments and to overcome the weaknesses in the regulation of financial instruments exposed by the financial crisis.

Tonight, after months of negotiations, the European Parliament and the Council reached an agreement on the revision of the Markets in Financial Instruments Directive (MIFID II). This revision was proposed in 2011 by the Commission to respond to the speed of the market and technological developments and to overcome the weaknesses in the regulation of financial instruments exposed by the financial crisis. 

ALDE spokesperson on the file Olle Schmidt MEP (Folkpartiet, Sweden) said: "We set more robust, safer rules for the financial markets. For the first time there are now EU-rules on trading with high speed, so called high frequency trading and every venue and investment firm will have to set in place stronger system and trading controls,. The new EU rules also strengthen the investors' protection. We ensure that no consumers will be victim of misleading advice, surprised with unclear and unexpected charges and put in a financial position beyond his or her risk tolerance".

In this respect, to overcome the still on-going aggressive sales, the new directive introduces a ban on inducements where independent advice on investment products is given, obliges transparency for the costs of advice and fees as well as on the client's risk tolerance and requires investment firms, when designing a new product, to meet the customers' needs.

"The wellbeing and the robustness of the financial market, after all, rests on its credibility and on the clients' trust."

Moreover, Mr Schmidt concluded: "We set more rigorous transparency rules for all financial instruments in order to foster better competition in the financial and capital markets. This includes  between different trading venues, to introduce more transparency in the markets and to strengthen investors' protection".

European Parliament's Economic and Monetary Affairs Committee Chair Sharon Bowles (LibDems, UK) said: "MiFID II will begin a new era for the structure of European financial markets, ensuring much greater transparency in how financial instruments are sold, traded and used which will bring many benefits for European investors. We have taken steps to curtail food and other commodity speculation across the EU".

"As always, after a period of intense negotiations, there are aspects with which we are not happy and it remains to be seen whether the access rules will eventually open up the monopolies that certain financial market infrastructures currently enjoy or whether the lengthy transitional period before they take effect kills off competition".