Goldman Sachs Group has released a research note that outlines concerns about the revised Markets in Financial Instruments Directive. For example, analysts say open access could be delayed until 2019. However, the note mentions "overblown" initial reaction to MiFID II.
The European Parliament is scheduled to vote this week on an update of the Markets in Financial Instruments Directive, which would exclude proprietary flow and equities from organised trading facilities. Deciding which instruments would be covered by the OTF category has significantly divided lawmakers. Not including equities would change what the European Commission intended in its proposal, some experts say.
The European Commission is considering a revamp of the Markets in Financial Instruments Directive, but industry insiders are concerned about how the rules would apply to foreign exchange. Forex dealers are concerned that unique aspects of the market would be overlooked, because MiFID proposals do not provide the clarity they seek on the definition of organised trading facilities. AFME CEO Simon Lewis called for clarity regarding the OTF definition and what can and cannot be done in regard to market making and trading.
The latest draft of the revised Markets in Financial Instruments Directive includes significant changes from the previous version. MiFID II would put fresh restrictions on high-frequency trading and institute rules governing access criteria between trading venues and central counterparties. Industry participants familiar with the latest draft voiced concerns.