In a vote in the committee on economic affairs, the S&D Group abstained on the so-called Markets in Financial Instruments Directive (MiFID) quick fix. With this proposal, the European Commission aimed to make some amendments to MiFID regime, in order to address the impact of the Covid-19 crisis, to encourage investment in the real economy and free up resources for both firms and investors.
Eero Heinäluoma MEP, S&D negotiator on the file, said:
“I am happy that the committee did not give a green light to start the trilogue negotiations. From a democratic point of view, it is important that now the whole Parliament can give its view on the proposal in its November session. I hope that all interested parties and especially the NGOs will take an active role in the discussion before the Parliament session.
“Our starting point was clear: this should be a quick fix that should be strictly linked to the impact of the Covid-19 crisis. It was clear that the rapporteur and the Commission have another agenda; they are trying to extend the scope as much as possible. I do not believe this is the way we should make legislative changes. It is regrettable that the European Commission pushes the Parliament into playing this game. The Commission also admitted that it overstepped its role by not presenting a proper impact assessment around some of the provisions it proposed. Proper EU legislation can only be made if every EU institution plays its role correctly. The review of the MiFID file should come next year, at the latest by July 2021, after a proper impact assessment undertaken by the European Commission, and after having taken the European Securities and Markets Authority’s (ESMA) advice.
“The S&D Group is not in favour of turning this quick fix into a deregulation exercise using the pretext of tackling the impact of the Covid-19 crisis. Therefore, this negotiation was for us an exercise in damage control to prevent that some key provisions for investor protection were emptied of its substance. Indeed, for us it is critical that MiFID contains clear minimum product governance rules, which are there in the first place to protect investors who are far too often victims of misselling. Therefore, we believe it is positive that a majority in the economic affairs committee support this line. Furthermore, on the research unbundling, we managed to stick to the status quo despite enormous pressure from the rapporteur, who was willing to make these rules completely obsolete. Yet - these rules are critical to ensure full price transparency around the cost of research into a particular company and the cost of execution.”
Jonás Fernández MEP, S&D spokesman on economic affairs, said:
“It is regrettable that we lost with 1 vote the text on the reform of position limits in derivative contracts. These provisions were agreed following G20 commitments after the latest financial crisis and the crisis around food prices. The outcome of the vote demonstrates the deep division in this House around a sensible point as position limits. We now have the opportunity to change the text in plenary.
“For our group it is therefore clear: we are in favour of measures to support small and mid-caps to get better access to market finance. However, this should be done in a way which goes hand in hand with strong investor protection rules and full price transparency. We are not willing to be part of a deregulation agenda, under the pretext of addressing the impact of Covid-19. We expect an ambitious review of the MiFID file, next July, after a proper impact assessment, and consultation with ESMA and all relevant stakeholders. For these reasons, we did not support the outcome of the text as it stands and look forward to drastically improving it in plenary.”