Brussels, 16/04/2014 (Agence Europe) - On Tuesday 15 April, the European Parliament endorsed MiFID II legislation to strengthen the rules governing the financial instruments market (see EUROPE 10997).
The agreement increases transparency by requiring standardised derivatives to be traded solely on regulated bourses and for anonymous trading to be banned. Provision is made for the creation of organised trading forums, new categories of trading platforms, which will deal with non-share financial products such as structured products, standardised derivatives and CO2 emission quotas. Competition will be boosted for trading will be encouraged by ensuring non-discriminatory access to trading platforms and central clearing houses.
HFT. High-frequency trading will be covered by new prudential rules via trading inspections and liquidity requirements for market makers. The European Parliament's demand for order to be retained for at least half a second was rejected.
Based on information provided by the European Securities Authority (ESMA), countries may set caps on net holdings of commodity derivatives (but not on all contracts across the board) with a view to preventing speculation from pushing up the price of staple foods. (MB)