Brussels, 13/05/2014 (Agence Europe) - On Tuesday 13 May, the Council of the EU formally endorsed the changes to the EU rules on financial instruments markets known as MiFID II.
Most of the changes will apply by 30 months after the rules come into force, and will boost transparency by allowing the trade of standardised derivatives solely on regulated trading platforms and banning anonymous trading in shares. A new type of trading facility, the organised trading facility, will be set up to deal with financial products other than shares (structured products, standardised derivatives and carbon trading quotas).
Competition on trading platforms will be encouraged by ensuring non-discriminatory access to the platforms and central clearing houses (CCP).
HFT. High-frequency trading (HFT) will be subject to new prudential rules through monitoring of trading and liquidity requirements for operators doing market-making. The European Parliament's desire to introduce a minimum retention period of half a second was rejected.
Based on guidelines from the European Securities and Markets Authority, member states may put caps on an investor's holdings in commodities (wheat, soya beans, sugar and so on) in order to prevent speculation from sending prices shooting up too high. Other holdings may not be capped. Players must keep regulators informed of their holdings at least once a day. Coal and oil derivatives will be exempted from requirements to go through clearing houses. (MB)