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UK FSA pushes for Mifid II rethink on OTCs

Tuesday 31 January 2012 - by Karina Whalley



The Financial Services Authority has therefore suggested a phased approach, per product market to any introduction of pre-trade transparency requirements which could be tailored to fit the asset class.

"This will allow sufficient time for the European Securities and Markets Authority to develop a set of properly calibrated and granular regimes, including criteria for the use of waivers, taking into account differences in trading model across asset classes," the FSA markets director said.

In terms of passporting, Mifid II states that third country firms will only be allowed to do business in the EU where their home jurisdiction is deemed to be equivalent and offers the same access rights to all EU companies.

"This is a much higher access threshold than under the existing regime and for similar regimes in other Directives, for example the AIFMD," Lawton contested.


The proposals also require all services to professional clients be provided through a physical branch established in the EU. But the FSA acting director warned that this would be "very harmful" to market end-users given the global nature of activity in EU's international financial centres.

"We fear that the current scope of access restrictions will curtail investor choice and competition. And ultimately risk EU firms being denied access to third country markets," he said.

The Commission proposals identify the same gaps that the FSA do, but Lawton has urged Europe to choose the right "materials", which work in the interests of issuers, investors and regulators, to plug them .


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