The Mifid: Competition in a New European Equity Market Regulatory Structure
Posted: 6 Dec 2005
Date Written: July 2005
Abstract
In 2004, the European Council and Parliament adopted a new directive on markets in financial instruments (the MiFID). The implementation of the directive in EU member states is still ongoing. We provide a framework for understanding some of the main features of this new regulatory structure. We summarize the economics of fragmentation and internalisation - issues that have been at the forefront of discussion throughout the MiFID consultation, approval and implementation process. We also provide lessons from the US regulatory experience, with a special focus on US trade reporting rules. We highlight relevant features of the largest European equity markets, describe the main features of the MiFID and provide recommendations on its implementation.
Keywords: securities regulation, fragmentation, internalization, Europe
JEL Classification: G15, G18, G2, K2
Suggested Citation: Suggested Citation