MiFID II Compliance: Unbundling Requirement Updates
The GFMA urges global coordination to prevent market disruptions from MiFID II unbundling changes. They fear loss of research access for MiFID II investment managers. Extend SEC's no-action letter until new requirements are finalized. GFMA comprises AFME, ASIFMA, and SIFMA.
MiFID II Unbundling Requirement Changes:GFMA Global Coordinations
The Global Financial Markets Association (GFMA) has submitted a letter to the leaders of the U.S. Securities and Exchange Commission (SEC), UK Treasury, and European Commission, calling for global coordination to prevent possible market disruptions due to changes in the MiFID II unbundling requirement. The GFMA, consisting of the Association for Financial Markets in Europe (AFME), the Asia Securities Industry & Financial Markets Association (ASIFMA), and the Securities Industry and Financial Markets Association (SIFMA), is concerned that such disruptions may lead to the loss of access to essential research provided by U.S. broker-dealers to MiFID II investment managers. The association suggests extending the SEC staff's MiFID II no-action letter until the changes to the MiFID II unbundling requirement can be completed and implemented.
MiFID II Regulaation: Avoiding Market Disruptions Due to Unbundling Requirement Changes
The Global Financial Markets Association (GFMA), consisting of the Association for Financial Markets in Europe (AFME), the Asia Securities Industry & Financial Markets Association (ASIFMA), and the Securities Industry and Financial Markets Association (SIFMA), has recently submitted a letter to the U.S. Securities and Exchange Commission (SEC), UK Treasury, and European Commission, urging global coordination to prevent potential market disruptions caused by changes in the MiFID II unbundling requirement. This article examines the implications of these changes, the concerns raised by GFMA, and suggests measures to mitigate the risks.
The GFMA's call for global coordination highlights several implications resulting from changes in the MiFID II unbundling requirement. Loss of access to critical research provided by U.S. broker-dealers to MiFID II investment managers can negatively impact investment decisions and lead to suboptimal outcomes for investors. Furthermore, uncoordinated changes may cause market disruptions, increased volatility, reduced liquidity, and the potential for regulatory arbitrage, where market participants exploit regulatory differences across jurisdictions.
To address these concerns, GFMA suggests extending the SEC staff's MiFID II no-action letter until the changes to the unbundling requirement can be completed and implemented. This would provide temporary relief and maintain access to essential research. Additionally, regulators should actively monitor the situation, adapt their approach as needed, and promote global coordination to develop a harmonized regulatory framework.
In conclusion, the GFMA's call for global coordination emphasizes the importance of proactive measures to prevent potential market disruptions resulting from changes in the MiFID II unbundling requirement. Extending the SEC staff's no-action letter and fostering harmonized regulations can create a favorable environment for market participants while ensuring the integrity and efficiency of financial markets. Regulatory authorities must collaborate to maintain optimal outcomes for all stakeholders involved.
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