Some last-minute oral amendments were introduced before the vote was taken, a source familiar with the matter said. These were said to affect the definitions setting out the types of entities that are not covered by MiFID, as well as certain investor protection measures. The details of these amendments were not immediately available.
The 196-page text of what is generally referred to as MIFID2 is now expected to go for a first reading vote of the full Parliament, “possibly” the week beginning on 22 October, according to Philip Woolfson, a Brussels-based lawyer with Steptoe & Johnson who has been monitoring the developments on behalf of the Association of International Life Offices.
The MIFID update covers a broad range of measures, but it is a controversial proposed ban on commissions and third-party “inducements” – known as Article 24 – that is of particular concern to those in the life insurance, investment products and advisory industries.
The legislation also provides for limits on so-called high-frequency trading, which has been targeted by some experts for contributing to the volatility of global stock markets, and giving an unfair advantage to those with access to such trading facilities.
The vote was 45 to zero, sources said.
It is understood additional changes to the document are likely before it becomes law, in around three years’ time.
Sources said Markus Ferber, a German MEP who is overseeing the legislation’s progress to final approval, is keen to push ahead for a first reading vote next month rather than waiting for the European Council of Finance Ministers to give its views, which would not be possible before its next meeting, tentatively scheduled for November.
AILO chief executive Alan Morgan-Moodie said he continued to support the views of Markus Ferber and he also sounded a positive note on the commission issue: “I believe it to be a less than total ban on commissions but we await to see the outcome.”
The original MIFID directive took effect on 1 Nov 2007, and was designed to promote liquidity, boost competition between Europe’s stock exchanges, and improve investor protection by imposing the same standard regulations across the EU.
