The Committee of European Securities Regulators published a trio of discussion papers Tuesday, proposing to overhaul various aspects of a key part of the region’s regulatory regime.

The CESR published three papers that propose a variety of changes to the Markets in Financial Instruments Directive (MiFID) that was implemented in November 2007 to harmonize regulation and encourage trading competition across Europe. This latest review includes proposed technical advice by the CESR on investor protection and intermediaries, equity markets, and transaction reporting.

Since MiFID was adopted European financial markets have undergone a fundamental restructuring, the committee notes, “For instance, markets have seen greater competition and more pan-European trading, the emergence of dark pools, consolidation between exchanges, improvements in trading technology as well as other innovations, such as smart order routing, algorithmic trading and new clearing arrangements.”

In its three consultation papers, the CESR addresses areas of the MiFID legal framework where it has identified a need for improvement, including quality, cost and consolidation of post-trade transparency data and delays in the publication of such data. Additionally, in light of the global financial crisis, it says that “regulators have seen a need to focus more on selling practices for certain financial instruments, in order to further improve the protection of investors, in particular retail investors.”

“MiFID is one of the cornerstones of the regulation of securities markets in the EU. Ensuring that the regulatory framework keeps pace with the changing shape of financial markets is key, especially as the directive itself was conceived with the strong intention of encouraging the modernisation and progress of Europe’s securities markets, whilst also seeking to ensure that this progress affords the investor with the necessary protections to ensure a strong degree of market confidence,” said Eddy Wymeersch, chair of the CESR and chair of the supervisory board of the Belgian Commission Bancaire, Financiere et des Assurances.

“The proposals developed in these three consultation papers which form the first phase of CESR’s work to provide the commission with technical advice, are focused on ensuring that market confidence is strengthened further,” Wymeersch added. “We are also seeking to make progress on convergence to ensure that market participants can effectively benefit from the single market and that retail investors have greater certainty dealing on a cross-border basis.”

The committee is seeking comment on all of the three consultation papers by May 31.

IE