The current Mifid II consultation is infamously complex, covering 800 pages and 800 questions to be answered in 8 weeks. If that in itself is not enough of a challenge, Esma invited all market participants to Paris this week for a two-day Tour de Force, aka public hearing.
Be it equity, non-equity, pre- or post-trade transparency, SIs (systemic internaliser), OTFs (organised trading facilities), trade reporting, third country regimes, liquidity measures, best execution, investor protection, commodity derivatives, position reporting or position limits, there was hardly a topic left out of the discussion.
Many open questions were raised, including whether DMA (direct market access) providers must require their clients to reveal their algo source code, whether the SI regime also applies to the repo market, and how Emir and Mifir trade reporting rules relate, revealing the true extent of the confusion that still reigns across the industry.
While Esma didn’t necessarily provide the answers, they noted all the points for consideration in the next proposal for Level 2.
It became apparent that, with the amount of work ahead of us, the two and a half years we have until Mifid II is applied is no time at all and it will certainly not be an easy ride. And if there is anyone left with time on their hands they can look forward to another public consultation by Esma on the trading obligations for derivatives under MiFIR, coming soon