The European Fund and Asset Management Association (EFAMA) has called for the removal of the ‘10% depreciation alert' as it "encourages short-term behaviour, does not provide any added value…and increases operational costs," among other recommendations in its response to the European Commission's review of MiFID II/MiFIR.
It has proposed revisions to Level 1 texts only and has indicated these can be achieved through a "more flexible interpretation" of the framework "via targeted amendments", while also suggesting annual thematic Q&A updates.
Regarding investors protection, EFAMA recommended: greater flexibility for professional investors and eligible counterparties to opt out of many cost disclosures as well as the scrapping of the ‘10% depreciation alert'; while it agrees with the notion of a ‘semi-professional' client, it believes a new category is not the solution; retail AIFs should be considered non-complex financial instruments; no outright ban on inducements as it would have "substantial and far-reaching consequences" for access to investment advice; issuer-sponsored research should qualify as an acceptable minor nonmonetary benefit.
We reiterate our support for the overarching objectives of the MiFID II and MiFIR framework, which, for the most part, is working as intended."
And for capital markets and infrastructures, EFAMA says it does not believe MiFID II delivers a consolidated tape and that the notion of "reasonable commercial basis" in data costs has been "overlooked", while also calling for the share trading obligation and the derivatives trading obligations to be scrapped.
It has also recommended that FX spot remains excluded from the list of financial instruments and that the Systematic Internalisers's regime be protected "to shield liquidity and financial market innovation."
Tanguy van de Werve, director-general of EFAMA, said: "We reiterate our support for the overarching objectives of the MiFID II and MiFIR framework, which, for the most part, is working as intended."
"We are calling for targeted improvements such as to provide more flexibility to professional investors, to increase market transparency by mandating the creation of a consolidated tape for all financial instruments and to address data quality and data cost issues through a stricter enforcement of existing rules.