Brussels, 20 February 2024
The Council adopted changes to the EU’s trading rules, which will give investors a better access to the market data necessary to invest in financial instruments and increase the global competitiveness of the EU’s capital markets and ensure a level playing field.
The changes concern the Markets in Financial Instruments Regulation (MiFIR) and the Markets in Financial Instruments Directive (MiFID) which together regulate investment services and financial markets activities in the EU. The aim of the new rules is to empower investors, in particular by making consolidated market data easily available at EU level.
Consolidated market data
Currently, trading data is scattered across multiple platforms, such as stock exchanges and investment banks, making it difficult for investors to access the accurate and up-to-date information they need to take decisions.
The rules adopted today establish EU-level ‘consolidated tapes’, or centralised data feeds for different kinds of assets, bringing together market data provided by platforms on which financial instruments are traded in the EU. The consolidated tapes will aim to publish the information as close as possible to real time.
As a result, investors will have access to up-to-date transaction information for the whole of the EU. This will make it easier for both professional and retail investors to access key information such as the price of instruments and the volume and time of transactions.
Payment for order flow
The new rules also impose a general ban on ‘payment for order flow’ (PFOF), a practice through which brokers receive payments for forwarding client orders to certain trading platforms. Member states where the practice of PFOF already existed may allow investment firms under its jurisdiction to be exempt from the ban, provided that PFOF is only provided to clients in that member state. However, this practice must be phased out by 30 June 2026.
Commodity derivatives
The review also introduces new rules on commodity derivatives.
Next steps
This is the final step of the adoption procedure. The texts will now be published in the EU’s Official Journal and enter into force 20 days later. The regulation will apply immediately in all EU countries, whereas the member states will have 18 months to bring into force the laws, regulations and administrative provisions necessary to comply with the directive.
Background
On 25 November 2021 the Commission presented a review of the Markets in Financial Instruments Regulation (MiFIR) and the Second Markets in Financial Instruments Directive (MiFID II), which together regulate investment services and financial markets activities in the EU. The aim of the review is to increase transparency on capital markets, improve competitiveness and ensure a level playing field.
- Directive on markets in financial instruments
- Statements on MiFID II
- Regulation on enhancing data transparency, removing obstacles to the emergence of consolidated tapes, optimising the trading obligations and prohibiting receiving payment for order flow
- Statements on MiFIR
- Voting results
- Capital Markets Union (background information)
Source – EU Council