The most important challenge to confront in the MiFID review concerns the regulatory boundaries and requirements among the different execution venues.
CESR's Consultation Paper includes an estimate of OTC trading - a figure which was yet to be confirmed by an official source - and it also discusses some aspects of the business models used by OTC platforms. This is a welcome step in the right direction. Going forward, EU decision-makers should ensure that the principle 'same business same rules' is applied. Regulation must deliver efficient price formation, fair and orderly markets and a level playing field. These concepts need to be re-strenghtened in MiFID; to uphold these principles means re-installing much needed investor confidence in equity markets.
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