Marathon negotiations will boost confidence in Europe's capital markets

15-Apr-2014 @ 19:0

Kay Swinburne Kay Swinburne

Anthea McIntyre Anthea McIntyre

Anthea McIntyre Anthea McIntyre

Four years of painstaking work and intense negotiation ended successfully for Conservative MEPs today when the European Parliament finally approved key legislation on financial trading.

It is expected to bring better protection for investors and greater access to capital for small businesses.

The so-called MIFID 2 legislation (Markets in Financial Instruments Directive) passed its final legislative hurdle at the last Strasbourg plenary session before the current European Parliament ends.

It updates the EU's main regulatory structure for trading financial products such as shares, bonds and commodities, which were originally drawn up before the financial crisis. New rules acknowledge the lessons of the crash for aspects such as market structure, high-frequency trading, investor protection and position limits.

The final outcome broadly protects British interests and is seen as beneficial to the UK.

Kay Swinburne, who was lead Conservative negotiator on the legislation, said: "I am happy and relieved to have helped steer through this important legislation before this parliament is dissolved.

"I believe it will be good for investors, good for entrepreneurs and innovators, and a strong structural framework for the sector as a whole

“It strengthens corporate governance, improves transparency rules and fulfils G20 obligations on the trading of derivative products.

"Despite many conflicting national and political demands and pressures, we have come up with proportionate and balanced legislation which allows for fair and transparent financial markets. This will encourage investors and businesses to trust our capital markets, allowing them to fulfil their original purpose of fuelling growth in the economy.

“I consider the creation of SME Growth Markets, that will cover junior stock exchanges like Alternative Investment Market in London, to be a real step forwards in how we should be looking at financial markets in Europe. We will now be able to tailor all new EU financial legislation to reduce red tape for smaller business and encourage them to list on public markets sooner.

“We have already simplified the rules for listed SMEs in another piece of legislation voted by the Parliament today concerning settlement rules, where much more flexibility has been built in to encourage trading and investment in these companies.

“On Monday, Haydale Graphene Ltd, a company from West Wales that only started in 2003 listed on AIM in London – I am really proud that companies like this will be able to benefit from this piece of legislation and have better and easier access to the financial markets as a result.

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