Charting the Course: Unlocking Retail Participation in EU Capital Markets
BRUSSELS, 29 May 2024 – At the Roundtable on the distribution of retail investment products on 18 July 2023, the European Commissioner for Financial Stability, Financial Services and Capital Markets Union, Mairead McGuinness, invited the European Banking Federation (EBF), the European Fund and Asset Management Association (EFAMA) and Insurance Europe to advance an industry-driven process to explore common solutions aimed at increasing retail participation in EU capital markets.
Responding to the call, EBF, EFAMA and Insurance Europe coordinated a dialogue among financial and insurance industry stakeholders, and reached out to consumer organisations. This discussion paper titled “Charting the Course: Unlocking Retail Investment Participation in the EU” is the outcome of this collaborative effort and was presented at a second Roundtable meeting hosted by the European Commission on 11 April 2024.
The objective of the discussion paper was clear: to explore avenues for increasing European citizens’ participation in capital markets, recognising the dual imperative of economic growth and individual benefit. As underscored by the findings of recent high-level reports, such as those by Mr. Letta and Mr. Noyer, mobilising more savings towards EU capital markets is a necessary objective not just for advancing the Capital Markets Union (CMU), but for financing the long-term competitiveness of the EU as well.
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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EBF Position on MIFIR Review
BRUSSELS, 12 January 2023 – The European Banking Federation (EBF) is a strong supporter of deepening the Capital Market Union and believes that the MiFIR review proposal presented by the European Commission (EC) on November 25, 2021 is critical for increasing the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the EU’s regulatory framework. However, the EBF has concerns about several of the MiFIR reform proposals, which were not subject to proper analysis or impact assessments, making it difficult to assess their impact and potentially leading to unintended consequences for investment firms, clients, and the EU capital market as a whole.
- Consolidated Tape and Handling Increasing Market Data Costs: The EBF supports the EC’s proposal to establish a consolidated tape (CT) but suggests some adjustments be made and for ESMA’s recommendations to be included in binding EU legislation. The EBF also highlights that the creation of a CT may not solve the issue of increasing market data costs.
- Need for a Calibrated CT: EBF members generally support a well-calibrated consolidated tape, but the CT data needs to be of the highest quality to guarantee data excellence and dependable retrievability at all times. This includes well-calibrated deferrals in post-trade transparency obligations and not including the MIC code of the SIs, to avoid unintended consequences.
- Asset Class Priority and Scope of Data: The EBF suggests prioritizing the establishment of a CT for equity (also jointly with ETF instruments) over a CT for bond instruments, and for a proper cost-benefit analysis to be conducted for derivatives. The scope of data should include pre and post-trade data for shares and ETFs, and post-trade data for bonds as close as possible to real-time.
- Mandatory Contribution: The EBF welcomes the mandatory contribution submitted free of charge by trading venues and approved publication agreements to the CT provider. They also recommend a fair and bearable revenue sharing system for data contributors, to promote further harmonization of data formats, quality, and standards.
- Importance of MiFIR Review Proposal: The EBF believes that the MiFIR review proposal is critical to increase the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the EU’s regulatory framework. They encourage proper analysis and impact assessments for all proposed reforms to ensure the EU capital market is not negatively impacted.
For more information:
Marta Morellato, Financing Sustainable Growth team, m.morellato@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
The post EBF Position on MIFIR [January 2023] appeared first on EBF.
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EBF Position on MIFIR Review
BRUSSELS, 25 April 2022 – The European Banking Federation (EBF) is a strong supporter of deepening the Capital Market Union to enable financial markets to play a stronger role in light of the EU-27 financing challenges. The review proposal presented by the European Commission (COM) on 25 November 2021 is of critical importance to increase the competitiveness of financial market actors operating in the EU-27 and the attractiveness of the Union’s regulatory framework.
With these objectives in mind, the EBF finds it regrettable that several of the MiFIR reform proposals both for the equity and the non-equity transparency regimes are based on expected benefits that were neither subject to an in-depth analysis nor to a comprehensive impact assessment. This makes the impact of the proposals very difficult to assess and could lead to unintended consequences for investment firms, clients and the EU capital market as a whole.
In more details,
- EBF supports a well calibrated consolidated tape. However, we would like to highlight that the creation of a CT will not solve the issue of increasing market data costs.
- On equity transparency, the EBF would like to highlight the need for ensuring competitiveness and attractiveness of EU equity markets. We believe the current proposal regarding equity SI will create a three-tiered set of mid-point trading rules exacerbates the existing issues of complexity afflicting equity markets in Europe and damages investors’ perceptions of the quality of the market’s structure.
- On non-equity transparency, there is a need for well-calibrated deferrals taking the needs of clients and liquidity providers into account. In this context, both price and volume need to be deferred for longer periods than proposed by the Commission (i.e. endo of the day). We also support to keep the the size specific to the instrument (SSTI) as it is since it protects SIs against undue risks.
- Regarding payment for order flow, MiFID II already provides for a broad toolkit of regulatory measures in this scope (i.e. well calibrated provisions on conflict of interest, inducements and best execution).
Finally, our members’ experience from both MiFID I and MiFID II/MiFIR shows that there should be a minimum of at least 18 months from the time both Level 1 and Level 2 are published in the “Official Journal of the European Union” until they apply
For more information:
Paulin Guérin, Senior Policy Adviser Financing Sustainable Growth, p.guerin@ebf.eu
Marta Morellato, Financing Sustainable Growth team, m.morellato@ebf.eu
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About the EBF:
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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]]>EBF advisor: Elona Morina
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Publication date: 17 January 2020
The EBF acknowledges that the Directive represents an important and well-known tool supporting harmonising consumer protection rules on payment accounts within the Union. We also note that the recent transposition deadline of the Directive means that its complete impact and capabilities have still to fully unfold and it is impossible, at this point in time, to have a full assessment of the impact of the Directive in the market.
Moreover, several consumers’ satisfaction surveys undertaken in different member states show that consumers are well aware of and very satisfied with the switching services offered by their providers. For example, in a member state a 2019 study showed that awareness and satisfaction levels for the Current Account Switching Service remained consistently high at 79% and 92% respectively.
Finally, In line with the above, we also strongly recommend refraining from introducing IBAN-portability requirements without a detailed cost-benefit analysis clearly showing that the benefits for consumers outweigh the impact of a measure that would heavily damage the EU payment system.
For more information:
Elona Morina, e.morina@ebf.eu
Subscribe to the EBF Weekly + FinReg Agenda
Every Friday at noon you can receive the EBF Weekly + Financial Regulation Agenda. This agenda presents an overview of upcoming European and international meetings and conferences in financial regulation, as well as important general financial and economic events and key EBF meetings for the week ahead. CLICK HERE TO SUBSCRIBE
Subscribe to the EBF Morning Brief
The EBF Morning Brief is published Monday through Friday morning and brings you the top banking headlines, relevant announcements from the EU institutions and the latest from the EBF and its members, national banking associations in 32 countries in Europe. CLICK HERE TO SUBSCRIBE
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