The European Commission is probing the effectiveness of the product governance rules introduced to the industry in 2018 in its latest consultation on the Markets in Financial Instruments Directive (Mifid).
In a 94-page consultation document, published yesterday (February 26), the commission stated there was some debate over the efficiency of product requirements and asked participants how the rules had affected them over the two years they had been in effect.
The Europe-wide product rules were introduced in January 2018 — alongside Mifid II — in a bid to improve the industry’s product oversight and governance processes and are seen as a cornerstone of the reforms the EU put in place following the financial crisis. The aim is to improve investor protection and ensure transparent, efficient and competitive trading in financial instruments.
While the Commission sees the rules as having worked well overall, it believes some adjustments may be required.
The consultation addresses the possible introduction of a new transparency tool that allows investment managers, investment advisers and their clients to have access to "live" asset prices across the EU in a consolidated format (the consolidated tape).
It also consults on potential actions to foster research coverage for SMEs.
"We need well-functioning financial market rules to ensure that EU capital markets work, both for companies raising financing, and for Europeans looking to invest their money," says EC vice-president Valdis Dombrovskis: "This is an essential component of boosting our Capital Markets Union. Today's consultation aims to ensure that MiFID contributes to the CMU and our wider policy priorities."