MiFIR Review

EFSA/NSA position

As part of the trilogues on the MiFIR review, the EFSA (European Forum of Securities Associations), of which AMAFI is an active member, and the NSA (Nordic Securities Association) have put their priorities (AMAFI / 23-39) to the European institutions.

In this context, a meeting with representatives of the Swedish Presidency of the European Council took place in early May. The EFSA-NSA delegation took this opportunity to highlight fundamental issues such as the need to better regulate rising market data cost inflation. It supports the approach of the European Council and the Parliament to include the principle that “the price of market data must be based on the cost of production and dissemination of information with a reasonable margin,” in the Level 1 text, as recommended by ESMA.

With regard to the equity and non-equity transparency regimes, it highlighted the issues of the competitiveness of market participants and the attractiveness of the European Union markets and recommended calibrating the various thresholds at Level 2 in order to allow them to be adjusted more quickly in line with market developments, based on objective studies and data to be produced by ESMA. This approach seems all the more necessary due to the reforms planned in the United Kingdom aimed at making the City of London more attractive.

Commodities market

Also as part of the MiFIR review, AMAFI responded to the French authorities on the proposal of the European Parliament (report) on commodity derivatives. The Parliament proposes mandating ESMA to assess, by 30 June 2025, whether the setting of minimum holding periods on certain commodity derivatives would limit the volatility of these markets and ensure convergence between the prices of derivatives during the delivery month and the spot prices of the underlying product.

AMAFI is not in favour of this measure. These derivatives provide a hedge against market fluctuations, and, in the event of market stress, market participants seek to adjust their positions frequently. A minimum holding period would prevent them from unwinding their positions in the event of unforeseen circumstances. Such an obligation may also prevent the setting up of new hedges, as the requirement to hold existing positions could cause position limits to be exceeded.

The Association also wonders about the consequences of such a measure on the offer of trading platforms, which may be forced to withdraw certain products with maturities that are shorter than the minimum holding period.