The Wholesale Markets Review – fine-tuning the MiFID II regime?

23/07/2021

On 1 July 2021, HM Treasury published a consultation paper launching its Wholesale Markets Review, which is pitched as an opportunity to make the UK’s financial services rulebook “nimble and fit for purpose” following the UK’s departure from the EU. The consultation paper addresses a number of areas under the inherited MiFID II framework which market participants and the Government have identified as not achieving outcomes that are desirable for the UK market. The Government has also in many cases invited respondents to the consultation to give their views as to other changes that could improve or increase the effectiveness of the current regime, and firms may want to take this opportunity to engage before the consultation closes on 24 September 2021. Although a number of the proposed changes will be of interest and significance on a day to day basis to the firms affected by them, as the Government admits, the Wholesale Markets Review “is not about revolutionising the rulebook” and it does not represent a fundamental departure from the current second Markets in Financial Instruments Directive (MiFID II) based regulatory regime. In this article we highlight some of the points that are likely to be of interest to market participants. Trading venues perimeter. The Government is seeking views as to how to better clarify the regulatory perimeter for trading venues, given the breadth of the current definition which brings any “multilateral system” where trading interests can interact within scope. For example, the Government considers that the current definition has created ambiguity about the perimeter ...