NEWS UPDATE
REGULATION
European Parliament ’ s approval of Mifid / Mifir revisions a starting gun for change
As Mifid II amendments are approved , currently three consolidated tapes for Europe are in the pipeline with all three operational by the end of 2026 .
The European Parliament has voted to adopt the revised Markets in Financial Instruments Regulation ( Mifir ) and the Second Markets in Financial Instruments Directive ( Mifid II ) after five years in practice .
Following last year ’ s trialogues , amendments were drafted in October and final compromise texts on the revision of Mifid II sent to the chair of the European Parliament Committee on economic and monetary affairs . With the approval , it is now time for the European Securities and Markets Authority ( ESMA ) to define the technical standards .
Amendments to Mifir were adopted with 518 votes to 46 and 34 abstentions , while Mifid amendments were adopted with 521 votes to 19 and 57 abstentions .
The preparation of technical standards and procedures are now expected to follow throughout the year .
One of the key proposals adopted in January ’ s plenary session was the establishment of the EU-wide consolidated tapes ( CT ) – starting with bonds , as well as a general ban on payment for order flow ( PFOF ).
For a member state where PFOF is currently allowed , they will continue to be able to offer this until 30 June 2026 , after which it will be phased out . The complete ban mirrors that of the UK wherein a PFOF ban has been long standing .
Currently , Mifir foresees three consolidated tapes for Europe , a bond CT – set to be operational by mid-2025 , an equities tape set to be operational in early 2026 , and a derivatives CT planned for later the same year .
In addition , ESMA is set to assess the effectiveness of a CT for shares by 30 June 2026 , which includes consideration of the potential to add additional features to the equity pre-trade tape .
10 // TheTRADE // Q1 2024