Review of the MIFID II/MIFIR Framework

The revised Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (MIFID II/MIFIR) were critical elements of the European Union’s (EU) effort to address shortcomings exposed by the financial crisis. Among other things, the framework was aimed at incentivizing the trading of standardized over-the-counter derivatives on exchanges and electronic trading platforms where appropriate, in order to improve transparency and ensure a level playing field between existing trading execution techniques.

These objectives have not entirely been met, and adjustments are required to make rules on data and reporting, transparency and systematic internalisers more effective. In addition, the lack of equivalence decisions for non-EU trading venues, particularly in a post-Brexit environment, could result in market fragmentation.

EU policy-makers are now reviewing MIFID II/MIFIR in light of market developments to determine which legislative adjustments are appropriate. ISDA believes the European Commission should adopt a ‘Refit’ approach, rather than a complete re-write of the legislation. This paper explores five key areas where a recalibration of the rules would be appropriate and would further enable safe, efficient derivatives markets.

Click on the attached PDF to read the full paper.

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Documents (1) for Review of the MIFID II/MIFIR Framework

ISDA Recommendations to Simplify EU Regulation

On March 9, ISDA submitted a paper to the European Commission setting out focused proposals to improve the functioning of the EU regulatory framework for derivatives. The paper comprises eight targeted recommendations to simplify selected Level 1 provisions in a...

Refreshing the FX Definitions

A lot has changed in the FX derivatives market since 1998, when the last set of standard definitions for FX transactions were published. Trading volumes have grown substantially, and average daily turnover has risen by six times. Market practices have...