The European Commission retorted that third country regulators must respect each other’s legislation.
As early as June, I argued that while the intentions of Mifid II were honourable, there needed to be more monitoring of the progress of its implementation by regulators in Europe and beyond.
There are plenty of ways the European Securities and Markets Authority could better emulate some of the innovations introduced by the US SEC, not least its frequent topical roundtable discussions with an array of representatives from across financial markets.
Andrew Bailey, chief of the UK’s Financial Conduct Authority, is known to be seeking adjustments to elements of Mifid II.
The chairman of France’s financial markets regulator, the Autorité des Marchés Financiers, recently came out in favour of reforms to Mifid that would essentially lead to a new directive.
The current state of affairs is untenable. What we have seen in the past year shows that Mifid II goes too far and is too costly to implement.
If the cost of regulation continues to grow unchecked, it will begin to defeat the very purpose for which it exists. We should also consider what permanent damage Mifid II might have already made to markets.
One of Mifid II’s architects, Kay Swinburne MEP, said recently that Brexit will be the single biggest driver for a third Mifid directive.
Britain’s departure from the EU in March – which will crucially include the City of London – is certainly an opportunity to reassess Mifid II’s purpose and how it should achieve its objectives of a more transparent and yet still competitive marketplace.
Daniel Schlaepfer is president and chief executive of Select Vantage