EC Sends Formal Drafts Of 'Level 2' MiFID Implementation Proposals To Parliament

by Ulrika Lomas, for LawAndTax-News.com, Brussels

08 February 2006

The European Commission announced on Monday that it has presented formal drafts to the European Parliament and the European Securities Committee (ESC) for a series of technical measures implementing the Markets in Financial Instruments Directive (MiFID).

The MiFID is one of the cornerstones of the Financial Services Action Plan which seeks to create a single market for financial services in Europe, and is also a response to structural changes in the European securities markets.

The objective of the MiFID is to enable investors to invest and procure investment services across EU borders more easily, to remove obstacles to the use of the EU passport by investment firms, to foster competition and a level playing field between Europe’s trading venues, and to ensure appropriate levels of protection for investors and consumers of investment services across Europe.

The proposed measures now being submitted to the European Parliament and the ESC are the so-called "level 2" measures required under the "Lamfalussy" process; they will make operational the principles set out in the "level 1" Directive.

The draft measures are being tabled after a very extensive round of intense consultations with all stakeholders over the last two years, and are designed to protect investors and consumers without imposing unnecessary compliance burdens on firms.

Internal Market Commissioner Charlie McCreevy announced that:

"These Level 1 measures agreed by Parliament and Member States bind us to a basic framework. Our draft Level 2 measures matter. They will provide a high level of protection for investors while keeping red tape to a minimum. They will also increase cross-border competition to the benefit of investors and issuers alike."

"Our aim is to create a level playing field for firms and to provide clarity for investors, while at the same time ensuring that the new rules can be incorporated into national legal systems as Member States demand. I believe that we have accommodated both of these objectives."

"I now look forward to working closely with the Parliament and the Member States over the next few months to find the widest consensus possible. Meanwhile, firms should start preparing now for MiFID: there will be a first-mover advantage."

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