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Tuesday, October 16, 2012 6:37:37 AM

MEPs set date for MiFID II sign off

MEPs will vote on the European Parliament’s version of MiFID II on 26 October, with broad support expected on key issues including broker crossing networks and high-frequency trading (HFT).

The plenary vote requires all MEPs to vote on the version of MiFID II agreed on by the European Parliament’s Economic and Monetary Affairs Committee (ECON).

Rickard Ydrenäs, policy advisor to Olle Schmidt MEP, a member of the Alliance for Liberals and Democrats in Europe, told theTRADEnews.com final amendments made last week would ensure widespread support among MEPs on MiFID II.

“I expect there will be a huge majority in the Parliament for MiFID II with these additional changes,” Ydrenäs told theTRADEnews.com.

ECON’s version of MiFID II included a restructuring of a new trading venue category known as the organised trading facility (OTF). The European Commission had proposed using the OTF category to capture broker crossing networks – which were not formally recognised under the first version of MiFID – but ECON decided it would only be suitable for OTC derivatives that will be traded on exchange-like platforms under separate swaps reforms. ECON’s draft also included a ban on maker-taker pricing models and a requirement for all orders to have a minimum resting period of 500 milliseconds before they can be cancelled, as a way of curbing HFT activity. 

Attention will now turn to the Council of the European Union, which will propose its own version of the directive before reconciling it with Parliament’s version, a process which will be overseen by the European Commission. While the Council has held meetings on MiFID II this month, and has already proposed its own OTF solution, further clarity on when its version will be finalised is yet to emerge.

“I expect that our vote next Friday in Strasbourg will put some pressure on the Council but I don’t know when they will be ready to enter the into discussion with Parliament and the Council,” said Ydrenäs.

Richard Henderson +1 212 217 6916 richard.henderson@information-partners.com