EBF POSITION PAPER

EBF Position on MIFIR Review

BRUSSELS, 12 January 2023 – The European Banking Federation (EBF) is a strong supporter of deepening the Capital Market Union and believes that the MiFIR review proposal presented by the European Commission (EC) on November 25, 2021 is critical for increasing the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the EU’s regulatory framework. However, the EBF has concerns about several of the MiFIR reform proposals, which were not subject to proper analysis or impact assessments, making it difficult to assess their impact and potentially leading to unintended consequences for investment firms, clients, and the EU capital market as a whole.

• Consolidated Tape and Handling Increasing Market Data Costs: The EBF supports the EC’s proposal to establish a consolidated tape (CT) but suggests some adjustments be made and for ESMA’s recommendations to be included in binding EU legislation. The EBF also highlights that the creation of a CT may not solve the issue of increasing market data costs.
• Need for a Calibrated CT: EBF members generally support a well-calibrated consolidated tape, but the CT data needs to be of the highest quality to guarantee data excellence and dependable retrievability at all times. This includes well-calibrated deferrals in post-trade transparency obligations and not including the MIC code of the SIs, to avoid unintended consequences.
• Asset Class Priority and Scope of Data: The EBF suggests prioritizing the establishment of a CT for equity (also jointly with ETF instruments) over a CT for bond instruments, and for a proper cost-benefit analysis to be conducted for derivatives. The scope of data should include pre and post-trade data for shares and ETFs, and post-trade data for bonds as close as possible to real-time.
• Mandatory Contribution: The EBF welcomes the mandatory contribution submitted free of charge by trading venues and approved publication agreements to the CT provider. They also recommend a fair and bearable revenue sharing system for data contributors, to promote further harmonization of data formats, quality, and standards.
• Importance of MiFIR Review Proposal: The EBF believes that the MiFIR review proposal is critical to increase the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the EU’s regulatory framework. They encourage proper analysis and impact assessments for all proposed reforms to ensure the EU capital market is not negatively impacted.

For more information:
Marta Morellato, Financing Sustainable Growth team, m.morellato@ebf.eu

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About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.