FEDERATION OF EUROPEAN SECURITIES EXCHANGES (FESE)
Rue du Lombard, 41
B-1000 Bruxelles
T (0032 2) 551.01.80
F
512.49.05
www.fese.org
P700 Cover FINAL – 17th September 2004
CESR Secretariat
M. Fabrice Demarigny
11-13, avenue Friedland
F-75008 Paris
France
Brussels, 17th September 2004
(First) Response by FESE to
CESR’s Consultation on MiFID Implementation Measures (04-261b)
FESE is the representative organisation of Europe’s Regulated Markets and Derivatives and has
incorporated EACH, the European Association of Central Counterparty Clearing Houses. Our
Membership comprises all Members States of the EU, old and new, as well as the countries of the EFTA.
We welcome the opportunity to comment to CESR’s first set of advice on implementing measures for the
MiFID. We have included our comments in the Annex to this letter and have grouped them in three big
sections, in accordance with the structure of CESR’s work in expert groups and with the main sections of
CESR’s document. Our Annex B (on Markets) does already include or comments on the chapter on
market transparency; we would like to retain the possibility, however, to make one or more additional
remarks before the second deadline of early October. In Annex A, we have not yet commented on Best
Execution. We will do so within the next weeks.
Our comments include, among many others, the following important points:
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We seek clarity on the interpretation of Art. 5(2) MiFID and on the application of Art. 5-14 (and
18) on market operators that also operate an MTF.
The fair and clear information to be given by intermediaries to their clients should include a
presentation of the particularities of internalisers and internalisation.
Records to be kept by intermediaries (on clients as well as on orders) should include clients’
consent to off-exchange execution.
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We are dismayed by the level of detail and the narrowness of approach chosen by CESR in its
advice on pre-trade transparency for RMs. Allowing a more colourful variety of (existing and
new) market model is of crucial importance for Europe’s financial markets and their
competitiveness.
We do not agree with CESR’s proposals to display full order depth and to produce aggregate
post-trade info.
The fragmentation of pre- and post-trade information must not lead to a quality loss. Quality
standards have to be set for all arrangements in this area, including appropriate real-time
monitoring for post-trade data.
As a part of an extensive cost-benefit analysis, the discussion about possible transitory
arrangements for those markets where transaction reporting is new (e.g. commodity derivatives)
is justified and important.
Many FESE Members support CESR’s concept of proxies for the assessment of the most relevant
competent authority. We make several comments on the application of such proxies and in
particular about the appropriate interpretation and communication of assessment results.
It is difficult for us to see how national discretion in the content of trade reports is consistent with
the principles of the Single Market and CESR’s commitment to reduce burdens to a minimum.
We see little necessity to enshrine in European legislation a detailed list of scenarios when (or
when not) regulators would be forced to co-operate. FESE Members that are active across borders
appreciate the co-operation of their regulators. Some of the proposals go far beyond what is in our
view justifiable and necessary.
We appreciate CESR’s efforts to solve the problems around transaction reports by remote
members, but we have to reiterate our critical comments of earlier that these efforts focus on the
interests of intermediaries and regulators and less on those of market operators as reporting
agents.
We hope that CESR will find the comments in the Annexes useful in its deliberations, we are of course
always available for the discussion of any related matters, and we look forward to further good cooperation.
Yours sincerely,
Gregor Pozniak
Deputy Secretary General
FESE