Regulation  

EU share trading curbs scrapped

The Wealth Management Association has secured the deletion of a regulation which would have curbed the share trading rights of individual investors in the EU, Tim May has claimed.

The chief executive of the body, formerly known as the Association of Private Client Investment Managers and Stockbrokers, said the now-deleted article 28a of the European Union’s Markets in Financial Instruments Regulation would have required all transactions for individual investors, such as equity and bond trades, to go through a clearing house.

The result of the MiFIR article would have been the effective termination of the UK’s retail service provider system, which facilitated what Mr May called a “cost-effective and safe” share trading environment for around 20m transactions a year for private clients, trusts and charities.

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Retail service providers are intermediaries which enable smaller investors to buy and sell shares alongside the major investing institutions by supplying guaranteed counterparties and prices.

They also provide private clients with the additional protection of operating under the rules of a stock exchange, with deals going straight to settlement, and bypassing the need and cost for netting and clearing.

Mr May said the WMA had vehemently opposed the MiFIR article and had lobbied the EU to demonstrate the numerous problems it would have caused, supported by other trade bodies, HM Treasury and the FCA.

He added: “This is a victory for our continued use of the UK system, ensuring our model, although different from a large proportion of the EU, is still valued and allowed to flourish.

“A presumption had persisted among Europe’s regulators that all financial services could be categorised in the regulatory silos of wholesale and retail.

“Our members require access to the global financial markets (wholesale) in order to serve the needs of their individual clients (retail). Therefore this decision by the EU authorities is a welcome recognition of our industry, which manages some £600bn for more than 4m investors across the UK.”