Joint trade associations urge policy makers not to concede to suboptimal outcomes in MiFIR review

In a joint press release, AFME, EFAMA and BVI are urging policy makers not to compromise on the MiFID/R, as it may result in suboptimal outcomes. They are emphasizing the need for an evidence-based and ambitious approach, even if it means more time is required for negotiations.
MiFID/R is crucial for the development of a CMU that benefits investors and issuers, as well as for promoting integration and competitiveness of EU capital markets globally. The responsibility for the failure of EU capital markets to meet the needs of users, including corporations seeking optimal asset valuation and investors seeking sustainable and high returns, lies with policy makers. Additionally, the inability to enact legislation to establish critical market infrastructure could put the EU at a disadvantage compared to other global markets.
Regarding equity markets, EU companies have been conducting IPOs outside the EU or moving their listings elsewhere to achieve better valuations. Policy makers must consider the impact of rules on market liquidity, which is crucial for companies seeking financing for investments through improved valuations.
The establishment of a consolidated tape for equities is also a priority, with investors, banks, and market participants demanding the inclusion of five levels of real-time pre-trade data at a reasonable price. Without these requirements being met, the consolidated tape would be of limited use and commercially unviable.
In the fixed income markets, which are essential for a successful CMU, policy makers are urged not to undermine the viability of EU corporate and sovereign bond markets. Legislation should ensure a well-calibrated transparency framework that protects investors and addresses challenges arising from regulatory changes outside the EU. The impact of new rules on market liquidity, particularly in relation to bond deferrals, should be carefully considered.
Regarding market data, the trade associations appreciate efforts to protect data users and emphasize the need for prices to be based on the cost of production. However, they argue that the proposed compromise still allows for value-based pricing, which should be disallowed to achieve better outcomes for investors and the general public.