EU goes MAD
27-10-2011
or maybe just MiFID, (II).
Notwithstanding the threats to EU and its currency's health, the wheels of regulation continue to grind on. That they grind exceedingly small begs a question. They call it transparency of information. Like all good regulators they've been unable to resist gold plating internationally agreed standards. The fear we may quite reasonably all have is what they might do with so much information. For our part, we think very little, simply because there will be too much of it. Imagine a small bag of rice; you can handle it easily and see all the grains without too much effort and sorting into metaphorical piles is not hard. Now think of ground rice and imagine the same exercise. Ardent north Europeans can consider wheat and semolina, it's all the same.
While there is much to examine in the proposals, an interesting (and we consider welcome) innovation appears in MiFID II governance procedures, imposing a responsibility in all directors to both assess and challenge the decisions of senior management. This duty is devolved on all executive and non-exec directors and will require knowledge, expertise and skill within boards. We have long supported the notion that banks should be governed by qualified bankers, even if it doesn't agree with FSA's notions; we await events.
MiFID II will extend remorslessly in other areas and we recommend close study of all changes.
MAD II should be examined with care. One new offence has caught our eye and should plug a gap in the armour - maybe. Market manipulation has always been a slippery customer and MAD II is having a crack at it by defining it. The bare bones looks for false or misleading signals or person(s) in collaboration to keep prices at an abnormal or artificial level. Proof will be in the pudding, but a virtuous act nevertheless.
Implementation is likely to take up to two years, although some parts could apply after publication of the Official Journal. An added delay is likely as member states usually must transpose the provisions into national laws.
Orlando
Additional reading: the professional presses of accounting and law firms have been rolling all over the EU. It seemed invidious to choose between them so we suggest that you approach your favourite for early complimentary analysis.
While there is much to examine in the proposals, an interesting (and we consider welcome) innovation appears in MiFID II governance procedures, imposing a responsibility in all directors to both assess and challenge the decisions of senior management. This duty is devolved on all executive and non-exec directors and will require knowledge, expertise and skill within boards. We have long supported the notion that banks should be governed by qualified bankers, even if it doesn't agree with FSA's notions; we await events.
MiFID II will extend remorslessly in other areas and we recommend close study of all changes.
MAD II should be examined with care. One new offence has caught our eye and should plug a gap in the armour - maybe. Market manipulation has always been a slippery customer and MAD II is having a crack at it by defining it. The bare bones looks for false or misleading signals or person(s) in collaboration to keep prices at an abnormal or artificial level. Proof will be in the pudding, but a virtuous act nevertheless.
Implementation is likely to take up to two years, although some parts could apply after publication of the Official Journal. An added delay is likely as member states usually must transpose the provisions into national laws.
Orlando
Additional reading: the professional presses of accounting and law firms have been rolling all over the EU. It seemed invidious to choose between them so we suggest that you approach your favourite for early complimentary analysis.