AMAFI-Portuguese Finance Ministry meeting,14 November

With negotiations underway within the European Council on the MiFIR review, AMAFI Chairman Stéphane Giordano and Director of European and International Affairs Arnaud Eard met with representatives of the Portuguese Finance Ministry to discuss the compromise text prepared by the Council’s Czech presidency.

AMAFI spoke about the importance of enhancing the competitiveness of European businesses and making Europe’s regulatory framework more attractive. It welcomed the Czech proposals on equity and non-equity transparency regimes, aimed at preventing a regulatory gap with the United Kingdom which could trigger a transfer of liquidity.
Portugal’s representatives expressed overall support for the proposals on the non-equity transparency regime. However, they were more cautious on the proposed amendments to the equity transparency regime, which they felt were too similar to those mooted by UK authorities.

On the topic of a pre-trade consolidated tape for equities, AMAFI and the Portuguese representatives expressed disappointment at the turn taken by negotiations within the European Council, which appear to be tilting towards establishing only a post-trade tape.

As regards payment for order flow (PFOF), which is critical to achieving an agreement under the Czech presidency, AMAFI insisted that if a ban were introduced, it must be restricted to equities and should not extend to other products such as warrants, whose price discovery mechanism is not order-linked. Portugal’s representatives said they were not in favour of a ban and supported better regulation of PFOF-related practices.

AMAFI-European Parliament meeting, 17 November

As part of talks underway within the European Parliament’s ECON  Committee, an AMAFI delegation led by the Chairman met with MEP Danuta Hübner, the rapporteur for the MiFIR review, to discuss the proposed amendments submitted by MEPs. AMAFI had provided its own draft amendments in mid-October, which addressed the creation of a pre-trade consolidated tape for equities as well as attractive equity and non-equity transparency regimes (AMAFI / 22-70).

While the rapporteur was fairly upbeat on the likelihood that the final report would include a proposal to create an ambitious pre-trade consolidated tape for equities, she was more doubtful on reforming the  equity transparency regime to incorporate questions of EU actors competitiveness. AMAFI once again reiterated the need to take account of the reforms currently under consideration in the UK and ensure that trading volumes do not migrate to Britain because Europe’s equity and bond markets are insufficiently attractive and competitive.

On the question of PFOF and a possible ban, Ms Hübner pointed out that this was the most divisive topic and that negotiations would be delicate.