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European Regulation - A Tale in Four ActsResearch and AnalysisPosted on Jun 15, 2012 by Fidessa
According to the Chinese calendar 2012 is the Year of the Dragon. But if you ask anyone in financial markets, 2012 is the year of the regulator. The current Influx of drafts, proposals, consultations, regulations and technical standards is enormous. So much so that it prompted seven of Europe’s most influential associations to voice their concerns in an open letter to the European Commission. But it is not only the industry that is suffering under burden; the regulators are feeling strain too. Member of the European Parliament’s Economic and Monetary Affairs Committee recently tabled thousands of amendments with the respect to the Markets in Financial Instruments Directive (MiFID) II and the Markets Abuse Directive (MAD) II – that’s plenty of bedtime reading materials for year to come.
This paper examines the key regulations affecting the European financial markets and looks at how they interrelate and their impact on market structure.
Act 1: Many good intentions
The characters in the tale of European regulation are many and diverse. One leading player is the European Securities and Markets Authority (ESMA) the supra-national organizational in which Europe’s national regulators (the UK’s Financial Service Authority (FSA), Germany’s Bundesanstalt fur Finanzdienstleistungsaufsicht (BaFin) among others) are represented.