The prosperity of London as a regional financial hub for more than two decades is an example of how the deregulation of financial markets would create more open and efficient markets. The European Union's (EU's) latest move is another step towards integrating the financial markets across Europe. The Markets in Financial Instruments Directive, known as MiFID, will come into effect from November 2007. This is an important development in the financial service industry of EU's plan for a single market. The directive embraces both wholesale and retail trade in securities, derivatives, exchanges and all sorts of related financial companies in the region. Besides synchronizing the securities trading, MiFID will protect investors' interests by removing stock markets' monopoly while helping companies to operate across the region. Experts say that the move will affect investment banks to stockbrokers and asset managers and it will alter the region's financial markets profoundly. On the other hand, the directive would transform the landscape for securities trading by introducing competition. The vendors, exchanges and securities firms are gearing to face the challenges under the new regulation. The directive can become a new big bang for EU.
The
MiFID is a foundation to move toward a single market in the EU financial services.
It was introduced in place of Investment Services Directive (ISD). The deadline
for all 25 member states is April 30, 2007 and grace period is up to November
2007. According to the new directive, firms can do business seamlessly across
national borders, which is expected to benefit many stakeholders in the financial
markets. However, Jeremy Scott, Global Financial Services Leader, PricewaterhouseCoopers
LLP says, "There is much to do still. Many individual countries have
yet to issue their detailed implementation plans and many firms are awaiting such
guidance before concluding their plans, but major financial services firms are
now setting aside sensible budgets for this." |
