CESR - Public Hearing on consultation on policy options for the review of MIFID

In its three consultation papers, CESR addresses areas of the MiFID legal framework where it has identified a need for improvement, including quality, cost and consolidation of post-trade transparency data and delays in the publication of such data. Furthermore, with the global financial crisis in the background, regulators have seen a need to focus more on selling practices for certain financial instruments, in order to further improve the protection of investors, in particular retail investors.

1The first consultation paper published today deals with issues relating to investor protection and intermediaries (Ref. CESR/10-417). With some exceptions, CESR has limited its review in this area to those provisions where the legal text of MiFID incorporated review clauses. In some areas, CESR has already suggested proposals for changes to the legislation. In other cases, CESR intends to provide technical advice to the Commission without providing specific legislative proposals, but setting out CESR's view on the policy approach that should be adopted. CESR's consultation covers six main policy lines :
- Requirements for recording telephone conversations and electronic communications
- Execution quality data
-Complex vs. non-complex financial instruments
- Definition of personal recommendation
- Supervision of tied agents and related issues
- MiFID options and discretions

2The second consultation paper deals with equity markets and was developed on the basis of CESR's continued work on the issues identified in its previous report on the impact of MiFID on equitysecondary markets functioning (Ref. CESR/09-355). It marks the culmination of nearly 18 months of work by CESR, including an earlier call for evidence published in November 2008 (Ref. CESR/08-872), fact findings, roundtables with market participants and presentations held by stakeholders.The main topics addressed in this consultation paper can be summarised under following headings:

- Retaining pre-trade transparency regime for organised markets
- Review of definition of and obligations for systematic internalisers
- Improving the post-trade transparency regime
- Enhancing application of transparency obligations to equity-like instruments
- Regulatory framework for consolidation and cost of market data
- Addressing regulatory boundaries and requirements
- liminating certain options and discretions of MiFID

3The third consultation paper (Ref. CESR/10-292) published today deals with transaction reporting.The paper sets out CESR's proposal for amending and clarifying the transaction reporting regime under MiFID. In preparing this consultation paper, CESR has benefited from the feedback given bystakeholders to its call for evidence (Ref. CESR/08-873) issued in November 2008. The key purpose behind the suggested amendments is to improve market supervision and ensure greater market integrity. The main changes proposed focus on:
- The introduction of a third trading capacity (riskless principal)
- Collection of and standards for client and counterparty identifiers
- Client ID collection when orders are transmitted for execution
- Transaction reporting by market members not authorised as investment firms

Next Steps

A public hearing will be held to cover these issues on 17 May 2010 in the premises of the CESR Secretariat in Paris. An agenda for the hearing will be published shortly on CESR's website where attendees can register (please see the section hearings). CESR intends to publish feedback statements for the three consultations launched today and provide its final advice to the Commission by the end of July 2010.

DOWNLOAD THE CONSULTATION DOCUMENTS

Consultation on CESR's advice in the context of the MiFID Review Transaction Reporting

Consultation on CESR's advice in the context of the MiFID Review Investor Protection and Intermediaries

Consultation on CESR's advice to the Commission in the context of the MiFID Review Secondary Markets