Earlier this year, the Commission started consulting on a series of priority areas as part of its ongoing MIFID II/MiFIR review. This ECMI webinar focused on two issues that are rather technical (and perhaps controversial) but are nonetheless key to the functioning of capital markets. These issues are investment research and the non-equity transparency regime. ‘Re-bundling’ will be allowed for small/mid-cap issuers and fixed income, as a response to criticism that unbundling reduced research coverage – even if the evidence is far from conclusive on this matter. MiFID II expanded the scope of the pre-and post-trade transparency to the fixed income space. However, there are concerns that the objectives have not yet been met, especially given the specific market structure. Proposals to simplify and improve the overall conditions for participants include liquidity thresholds, waivers and deferral options, for example.
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