EBF Response to the ESMA consultation on the proposal for a review of MiFID II best execution regime
Brussels, 16 December – The European Banking Federation (EBF) welcomes the ESMA consultation ESMA consultation on proposals to review MIFID II best execution reporting regime, as well as the EC legislative proposal dated 25th November 2021 to delete RTS 27 reporting.
The EBF considers that the RTS 27 and RTS 28 reports provide very little added value to investors and we believe these reporting requirements should be permanently removed from the level 1 text. We therefore fully support COMs recent proposal and consider that the temporary exemption introduced by MiFID Quick Fix is extended until the European Parliament and Council have adopted the MiFIR Review changes and they have been applied.
According to the experiences of our members with respect to RTS 27 and RTS 28 report we see that these reports are very rarely used by clients. We take the view that – based on our experiences – there is no demand on the investors’ side for such reportswhich are not fit for the purpose as too complex.
If the reports are kept, the EBF considers that it is very important to simplify the rules, to limit the scope of the reports and to make certain clarifications in order to increase legal certainty. Indeed, any amendments to best execution reporting rules require IT changes that are costly and administrative burdensome to implement. It is therefore important to focus on changes that can be clearly justified from a cost/benefit perspective. In addition, it is very important to avoid the creation of a “gap” between the expiration of the temporary exemption introduced by MiFID Quick Fix and the implementation of the amended RTS 27 and 28. The EBF therefore proposes that the temporary exemption is extended until any amended rule starts to apply.
Finally, the EBF deems appropriate to underline the importance to continue working on data quality improvement, in order to make the reports useful.
For more information:
Pauline Guerin, Senior Policy Adviser, Financing Growth firstname.lastname@example.org
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