Europe Readies MiFID Rollback to Increase Recovery Investment
- Unbundling rules are set to be loosened, EU documents show
- Change aims to help small firms raise money after pandemic
Traders monitor financial data as the second iteration of the Markets in Financial Instruments Directive (MiFID II) comes into force, as the DAX Index curve is displayed beyond at the Frankfurt Stock Exchange, operated by Deutsche Boerse AG, in Frankfurt, Germany, on Wednesday, Jan. 3, 2018.
Photographer: Alex Kraus/BloombergThe European Union is planning to roll back landmark regulations on securities trading and investment research, arguing that softer rules on the finance industry are needed to help the economy recover.
An EU plan to be unveiled in the coming days would loosen a key plank of MiFID II that forces investors to pay banks and brokerages for research separately from their trading fees. The “unbundling” rules have been criticized for removing the incentive for analysts to produce research, especially on smaller stocks that struggle to attract the attention of investors.