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BREXIT WILL DRIVE REGULATORY
CHANGES WITHIN MIFID II REVIEW,
SAYS MEP SWINBURNE
POLITICAL FACTORS TAKING CENTRE STAGE FOR FUTURE REGULATORY
REVIEWS OR INTRODUCTION OF MIFID III, ACCORDING TO MEP.
B
rexit and other European po-
litical factors will be the main
driver of any European regulatory
change in the near future, includ-
ing any changes to MiFID II or the
introduction of MiFID III, accord-
ing to MEP Kay Swinburne.
Within her keynote address
MiFID II author Swinburne high-
lighted the UK’s upcoming depar-
ture from the European Union in
March next year as a key influenc-
ing factor on how future regulatory
change may play out.
While Swinburne maintained
that the introduction of MiFID III
is a “reality”, it is more likely to be
formed through a series of reviews
to the existing MiFID II standards
and other technical amendments,
primarily driven by political moti-
vations.
“Even though I am a politician, I
take no pleasure in bringing poli-
tics into financial legislation and I
firmly believe that any review of a
highly technical dossier, anything
like MiFID II, should be kept at
a distance from serious political
influence,” said Swinburne. “But
I’m afraid it is a reflection of the
reality that I have observed in
Brussels over the last few months
that it would be foolish to consider
future regulatory change without
considering the political drivers
that are there right now.”
Citing Brexit as the “single
biggest driver right now for MiFID
30 // TheTrade // Winter 2018
III-type changes”, Swinburne
added that the UK was “fairly
guilty about not looking beyond
other political developments” but
underlined the importance of other
fundamental changes occurring
across Europe that will also play a
significant role in how regulation is
reviewed.
“We need to consider the upcom-
ing changes that will take place in
the EU and the EU’s own insti-
tutions,” Swinburne said, point-
ing to the upcoming European
Parliament elections in May 2019,
which in turn will place a greater
emphasis on fringe political parties
that traditionally “vote against leg-
islation, regardless of its content.”
Addressing the possible timeline
for when the industry could expect
to see a review of MiFID II, Swin-
burne said she would “write off the
first six months after the Europe-
an Parliament mandate”, instead
highlighting a number of changes
currently underway in Europe that
will impact on regulatory changes,
such as the SME performance re-
view and post-trade transparency
rules for the fixed income space.
“My concern now is that MiFID
III will be shaped not by data
resources, but by purely political
objectives, and above all, it is going
to be shaped very differently by the
relationship going forwards be-
tween the UK and the EU, and that
will override all the fundamentals
of market analysis,” she said. “So,
MiFID III, as it is known in that
nomenclature, may be a long time
coming. But changes are happening
now.”
“My concern now is that
MiFID III will be shaped
not by data resources,
but by purely political
objectives.”
KAY SWINBURNE