Report by the European Parliament

The European Parliament published in late July its draft report on the MiFIR review. AMAFI is delighted that one of the review's main goals is to boost the competitiveness of EU firms and make European markets more attractive to investors inside and outside the Union. These are issues that the association has been highlighting for years, including in a recently published memo (AMAFI / 22-09). AMAFI broadly supports the approaches proposed to set up the consolidated tapes for equities and bonds, as well as the transparency regimes (AMAFI / 22-58), which would put ESMA in charge of calibrating thresholds for the equity segment (as the FCA does in the UK), while allowing a four-week deferral period for large non-equity transactions.

In terms of the pre- and post-trade equity tape, AMFI considers that ESMA  should be required to stipulate through Level 2 measures how the income-sharing mechanism will work. These measures would then be approved by the co-legislators. The criteria for excluding smaller markets from contributing to the tape are to be specified in Level 1 measures.

However, AMAFI does not think that management companies should have to report their transactions – this is currently done on their behalf by the investment firms in charge of executing the trades – because such a requirement would probably entail operational difficulties and significant costs.

AMAFI - ESMA meeting

An AMAFI delegation led by the Chairman met in late June with Charlotte Sickermann, ESMA’s Team Leader Secondary Markets, to talk about the association's priorities for the current MiFIR review negotiations.

Ms Sickermann asked AMAFI in particular about the viability of a post-trade-only consolidated tape for equities. To reiterate the importance of pre-trade data, AMAFI responded by citing the use cases detailed in the findings of a study by Adamantia, a consultancy, and also in a study by Market Structure Partners, a strategic advisory firm. On the equity transparency regime, Ms Sickermann underlined the importance of monitoring any shifts in liquidity and stressed the need for European authorities to be able to respond if need be. Turning to the non-equity transparency regime, AMAFI called for a distinction to be drawn between euro markets and local currency markets when setting deferrals.